Thursday, August 2, 2012
The Weekly Standard: Go for the Gold! (Pay the IRS.):
Because conservatives are scrooges, the good folks at Americans for Tax Reform have gone through the fine print to find out what our Olympians will have to cough up to the IRS should they be lucky enough to win any medals in London.
Americans for Tax Reform, Win Olympic Gold, Pay the IRS: U.S. Olympic medal winners will owe up to $9,000 to the IRS:
While 529 hardworking athletes proudly represent the United States in the 2012 Olympics, any medals and money they earn wearing red, white and blue will be taxed by the IRS. According to research done by the Americans for Tax Reform Foundation, U.S. Olympic athletes are liable to pay income tax on medals earned and prizes received at the London games.
American medalists face a top income tax rate of 35 percent. Under U.S. tax law, they must add the value of their Olympic medals and prizes to their taxable income. It is therefore easy to calculate the tax bite on Olympic glory.
Americans for Tax Reform is correct that gold medalists' winnings are taxable, and it provides some leeway by saying that U.S. winners could be taxed up to $9,000.
Still, it's not likely that anyone would pay that much per medal in taxes. Any accountant worth their salt should be able to get the tax bill on medal winnings well below $9,000, and maybe even to zero. We rate the statement Mostly False.
Americans for Tax Reform: Responding to Politifact on Olympics and Taxes:
Politifact did an analysis yesterday where they found that ATR's claims about Olympic medalists paying taxes on their prizes was "mostly false." ATR stands by our research and finds the following flaws with Poltifact's analysis:
- ATR's primary claim is that the prizes are taxable, not that all medalists will necessarily owe $9,000 in taxes.
- ATR consistently said that prizes were taxable "up to" a 35% marginal tax rate.
- Deducting training expenses is not as easy as Politifact makes it sound.
- Politifact seems confused about how to use average vs. marginal tax rates.
- The goalposts got moved in order to slam ATR.
Politico: Marco Rubio: Don't Tax Olympic Medals:
Marco Rubio introduced today The Olympic Tax Elimintion Act, which would exempt U.S. Olympic medal winners from paying taxes on their medals.
Salon: Romney’s Olympic Tax Myth:
Republicans are outraged that Obama will tax Olympic athletes. Why he probably won't, but he should anyway.
Christine Hurt (Illinois), Should Olympians Be Taxed on Their Honoraria?