It’s been met with praise, and skepticism. (Via Yahoo!News)
“Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home,” Rubio said in a statement. “We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.”Americans for Tax Reform, a group founded by conservative activist Grover Norquist, estimated that Olympic medalists face a tax burden of as much as $8,986 when they return from the competition.
To me, the idea sounds great. Why should we punish our athletes with a tax burden because they represented us too well? However, Conor Friedersdorf of The Atlantic sees the proposed tax break to be out of step with Rubio’s general policy of overall tax reform.
But treating Olympic winnings as if they are singular and morally superior to other income, and even other prize income, cannot be justified, and least of all by someone who advocates tax code simplicity and objects to government picking winners and losers. Simplifying the American tax code is tremendously important. Rubio’s proposal tries to trade on that importance, but it is no more than a cheap stunt, and the man proposing it seems not to realize that the impulse behind his bill is the very one he needs to defeat if he’s serious about tax code reform.
It’s an interesting point. I wouldn’t go so far as to say Rubio engaged in a “cheap stunt.” Rather, it seems a genuine attempt to do a nice thing for (mostly young) Olympians who are helping promote America’s global prestige. I also don’t think that adding a line or two to the tax code to accommodate Olympic athletes would do much to convolute it.
However, over the last quarter century, doing well and representing your country on the global stage hasn’t necessarily translated to immunity from taxes. Even those who win the Nobel Prize learn that it comes with a hefty burden from Uncle Sam.
The fact that IRS gets a piece of prizes can be a rude awakening for Nobel winners. Martin Chalfie won a Nobel in Chemistry but lamented the tax bill. See Life After Winning a Nobel Prize. Before 1986, most prizes were tax-free. Now prizes and awards are taxable.
And of course, winners of Obama’s dinner raffles also must pay the tax man.
So what do you think? Do Olympic athletes trump Nobel Prize and Obama Dinner Raffle winners?
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