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August 02, 2012 10:11 AM The Olympic Medal Tax Pander

By Ed Kilgore

You could see this coming the moment Grover Norquist’s Americans for Tax Reform put out its press release on the tax liability of U.S. Olympics athletes who win medals and the honoraria that go along with them: Sen. Marco Rubio has introduced a bill creating a brand new tax loophole for the stars who are dominating our TV screens this week. The Atlantic’s Conor Friedersdorf explains why this is an idea that is fully as stupid as it sounds:

[T]his is a perfect example of why the tax code is a complicated and burdensome mess. Guys like Senator Rubio stumble upon a category of earning that they regard as being “different,” whether because there are campaign contributions in it for them, or because it advances a larger ideological agenda or, as in this case, because the category of people being taxed are popular. This particular loophole accords with a widespread intuition that the prize money and medals from an Olympic victory are unlike “regular income” that is subject to routine taxes….
But these are bad reasons to create a special exemption. The fact is that prize money from athletic victories is income, and there is no good reason for the government to treat that income differently than the income of all the non-Olympic athletes who earn analogous types of income. Why should Olympic athletes be exempted from paying taxes on their prize money, but not professional golfers, or poker players, or winners of literary prizes, or folks who win the lottery?

It’s a largely unanswerable objection, and Rubio won’t even try, because this is strictly about somebody at ATR getting a clever idea about how to politically exploit the Olympics while reinforcing the idea that taxes are the result of evil liberal hatred of “success.” Why not just exempt the Fab Five from all taxes for life? Why not exempt all successful, hard-working people from taxes? That, folks, is pretty much the whole sum and substance of the GOP’s economic agenda.

Now if you somehow fail to immediately identify the plight of Gabby Douglas with that of some Wall Street shark or Trust Fund Baby, then you might be halfway along the trail that leads from bemusement at this sort of effort to hijack a nationally unifying sports event to outright anger. I’m already there.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • c u n d gulag on August 02, 2012 10:23 AM:

    Why stop at the American Olympic medal winners.

    I'd really like this idea if it included the fans.

    The NY Giants, the team I've been a fan of my whole life, won the Super Bowl this past February.

    Do the team members, owners, and staff, also get tax breaks?

    And how about us fans?
    Do we get one for supporting OUR team?

    And if the NY Yankees win the World Series this year, do I, as a fan of theirs, get a tax break along with the players, owners, and staff?

    Will I get a double tax break, as a fan of both teams?

    All kidding aside - maybe this is just another attempt to give another tax break to the Romney's?

    If Rafalca wins, the prancing horsie can't keep the money - the Romney's do.

    Ok, maybe all kidding wasn't aside.

    Now all kidding aside - the Republicans are the absolute stupidest, most craven, feckin' morons on the planet.

    And if not - then they'll surely win either the silver or bronze.

  • dede21206 on August 02, 2012 10:34 AM:

    Most of our Olympic athletes seem to be pretty Patriotic people. And Patriotic Americans pay their taxes. They do not look for loopholes or exemption after exemption to avoid supporting the country they love. Freedom isn't free.
    And part of the cost of freedom is paying your taxes.
    I pay mine.

  • SYSPROG on August 02, 2012 10:42 AM:

    This is absolute BS. MOST of these athletes have no income to SPEAK of and won't be paying many taxes on these medals. Unless of course, Romney is ELECTED and then THEIR rate goes up. What about that Grover???

  • James M on August 02, 2012 10:42 AM:

    Ed,

    It doesn't matter!

    I don't mean your post, but from either a policy position, or simply from the viewpoint of any positive impact on people's everyday lives, 99.9% of what GOP politicians propose has no significant positive aspects. The whole list:

    1. Lack of 'Confidence' among 'job creators' supposedly caused by uncertainty over 'Obamacare'
    2. Same sex marriage
    3. Pre-abortion ultrasounds
    4. Submarine 'Sharia Law' or Muslim '5th columns'
    5. The Debt Ceiling
    6. Apologizing for America
    7. Offending 'Job Creators'
    8. 'Voter Fraud'
    9. Not 'understanding America'
    (Did I leave anything out?)

    None of these things will make a gnat's amount of difference for the living standards or economic well-being of the average American. None of the above will put a dime in the pocket of the vast majority of American voters. They are irrelevant in the pure sense of the word.

    The most insightful commentary I heard on U.S. politics came from a Columbia grad student from France working as a waiter in a seedy bar on the Upper West Side of New York during the Reagan Administration. Concerning Pres. Reagan's war-mongering rhetoric during the height of a recession, he said:

    (paraphrased) "His message is simple. You have no job but your country is strong!".

    It's more 20 years later now but Republican politicians are still running the same game!

  • Sgt. Gym Bunny on August 02, 2012 10:56 AM:

    What? Winning isn't enough???? The Olympians need tax breaks on top of representing their country in one of the most important sporting events in the modern free world? Do these GoOPers even think about how ridiculously childish they sound when they flaunt these half-baked schemes to the general public?

    On second thought, I think I already know the answer to that last question, for I'm pretty certain that they don't surround themselves with people who are willing (or smart enough) to bluntly ask, "What in the hell have you been smoking?"

  • Steve on August 02, 2012 10:57 AM:

    This is clearly an attempt to limit the Romneys' tax liability should their horse win a medal!

  • Sgt. Gym Bunny on August 02, 2012 11:09 AM:

    reinforcing the idea that taxes are the result of evil liberal hatred of “success.”

    Oh, pooh! If I wanted to get all amoeba-like in my thinking, I'd say that earning any income over $0 is success. So why should super-duper high income earners receive favorable treatment under the tax code instead of the working poor and everyone else in between? Methinks this is just another Rightward meme of my success is better than your success, bottom-dweller. Can we bring the idea that taxes are a civic duty back into the public discourse?

  • JCtx on August 02, 2012 11:22 AM:

    Instead of focusing on how much they might pay in taxes, why not focus on how much they are receiving for their wins. This is money that they would not have w/o having won a medal and that money is probably twice as much if not more than what they pay in taxes. So instead of saying that they will receive $25,000 for a gold medal, you can say that they will receive at least $17,000 after taxes. That is certainly decent money for a job well done. But Republican'ts will continue to focus on things that they don't have instead of what they do have which will always result in the kind of negative thinking that is uniquely conservative.

  • exlibra on August 02, 2012 11:33 AM:

    [...] there is no good reason for the government to treat that income differently than the income of all the non-Olympic athletes who earn analogous types of income. -- Atlantic's Friedersdorf

    I think the feeling that the Olympians are different is, probably, going back to the times when they were supposed to be strictly amateur, toiling away in a factory in the daytime, and practicing like mad in the evenings and on weekends. They were not allowed to profit in any way from their sport (no product endorsements, for example). Given those obstacles and the presumption that they were, financially, just one step ahead of the iconic "starving student in a garret", it made sense that their medals should be theirs, free and clear of any encumbrances, like taxes.

    At least that would have been my guess. But then, who knows what Rubio was thinking? Or, even, if he was thinking at all?

  • N.Wells on August 02, 2012 11:53 AM:

    "Why not exempt all successful, hard-working people from taxes?"

    Congratulations, you are halfway on your way to being a Republican. Your next step is to recognize that only people who earn >$250,000 per year are successful and hard-working.

    (Furthermore, people whose wealth consists of capital gains and/or inheritances are really, really, really hard-working.)

    (Next you simply need to cauterize your liberal bleeding heart against sympathy for black people, immigrants, uterus owners, democrats, and so on and so forth.)

    (/snark)

  • RepublicanPointOfView on August 02, 2012 11:55 AM:

    Ed Kilgore is full of sh!t, as usual.

    We republicans ARE in favor of taxing work (labor). It is non-work income that we do not want to tax. Of course, we also get to define what is income from work or capital.

    The reason to exempt Olympic athletes income is to show our patriotism beyond our standard display of patriotism that consists of multiple Chinese-made bumper stickers that say 'Support Our Troops'.

  • j on August 02, 2012 12:07 PM:

    I seem to remember Romney saying his wife took up horse riding to help her with health problems, she is not riding in London, she did not train the horse and has a multitude of people to care for it, she took a tax deduction of $77000.00 for it in the only tax return we know about.If riding is her hobby why is she eligible for a tax break?
    I hope reporters continue to hammer Romney about releasing his tax returns.

  • Varecia on August 02, 2012 12:57 PM:

    I pay taxes on every art award I receive, and I view it as I view other taxes; doing my part to invest back into America, the country that allows me the opportunity and the support system to pursue my dreams. I don't see how any Olympian could claim otherwise.

  • boatboy_srq on August 02, 2012 1:17 PM:

    [T]he feeling that the Olympians are different is, probably, going back to the times when they were supposed to be strictly amateur...

    exlibra nails it here - and the loophole deserves some pushback on those grounds.

    IF (if!) the athletes are indeed "amateur," then public resources over and above their training facilities, coaching, transportation and housing for the contests could be construed as "public assistance" and might change their status from "volunteer" to "federal employee." Imagine the howling from the Reichwing about "public employees" (who of course don't have "jobs" to begin with) getting a cheque from Big Gubmint for doing nothing more than swimming/running/lifting/whatever all day long for years, and then getting flown all over the globe in a government-owned (or operated) airplane just to show off how good they are at swimming/running/lifting/whatever. Plus, they get added to the "47% who pay no taxes" - which for folks who insist that we all pay something isn't good math.

    If, instead (as the NBA and other leagues seem to have arranged) the athletes are professionals doing this for a living, then why exempt this particular cheque, if it's earned just as their pro-athlete salaries are and those salaries are taxed as normal income?

  • c u n d gulag on August 02, 2012 1:25 PM:

    Rubio, et al, are missing the 2nd half of their very Conservative proposal:
    1. Give tax breaks to the winners.

    2. Tax the living sh*t out of Americans who aren't winners - aka: losers.

  • james on August 02, 2012 2:06 PM:

    Now that our noble Olympians are aware that they will have to pay taxes, they will probably try to do their best not to win anymore medals. If they don't win any medals, their endorsements and sponsorships will drop as will their income. They will be suspended from the Olympics for failing to do their best to win, which, as we have seen in badminton, is a serious violation of Olympic ethics. All of this will give the Republicans yet more proof that taxes disincentivize success.

    'Cause, you see, if Michael Phelps didn't have to pay any taxes he might, you know, actually try win a gold medal. It's so sad the taxes are holding him back.

  • SadOldVet on August 02, 2012 2:51 PM:

    To be fair to all parties involved, Rubio should change his bill to require that Olympic athletes never pay a tax rate higher than Mitt Romney. Lebron James can use a break.

  • Sgt. Gym Bunny on August 02, 2012 4:39 PM:

    One final thought...

    This just rather goes to show how the GOP is unaware that not everybody is motivated solely by the Benjamins.
    Earlier this summer, I earned an IFBB (physique league) card and I was absolutely elated to have won first place in anything other than elementary school sack-race. But I found it rather odd that when I shared my accomplishment with people, one of the first questions they asked was "How much money did you win?". Not a bad question, just rather tacky. I didn't win any money, but I didn't compete for the money.

    And I'm willing to bet none of the Olympians went to the Olympics solely for the money (passion, maybe). Being in the winner's circle feels pretty damn good, especially if you're at an event that very few people can qualify to participate in. When given the choice between paying taxes on their winnings or having their accomplishment scrubbed off the record, my instinct tells me that the average Olympic athlete would happily do the former. And the GOP clown committee trying to diminish their accomplishment to a matter of money is pretty disgusting...

  • Comfy on August 08, 2012 10:47 AM:

    Pres Obama supports tax exemption for Olympic medal winners ... is it still political pandering?