The US currently leads the medal table at the Rio Olympics, with the Internal Revenue Service (IRS) also set to come out a winner, as the nation’s athletes are required to pay tax on any medal they earn, as well as on the financial bonuses paid for getting to the podium
Gold medals are worth around $600 (£459) based on today’s commodity prices, a silver medal around $300 (£229) and copper-made bronze medals no more than $4 (£3). In addition, the United States Olympic Committee also pays cash bonuses to those who bring home the highest honours. US gold medallists are paid $25,000, silver winners $15,000, and bronze medallists earn $10,000. This is taxed as ‘earned income abroad’, as is the value of any medal.
According to the pressure group Americans for Tax Reform, this means the maximum tax bill could come to $9,900 for a gold medallist, $5,940 for a silver medallist and $3,960 for a bronze, using the top tax rate of 39.6% for highest earners, although the exact charge depends on each athlete’s other earnings and tax status.
Gymnast Simone Biles, the US heroine of this games with five medals, and long-time swimming supremo Michael Phelps, whose lifetime Olympics tally is 28 medals including 23 golds, could both face hefty tax charges on their haul. Some calculations suggest Phelps could face an overall Olympic tax bill of $55,440, although his net worth is also put at $55m. Following the 2012 London Olympics, there have been efforts to get US legislation changed to give Olympic athletes a tax break.
A bill has recently been passed in the Senate which would eliminate taxes on prizes for Olympic and Paralympic athletes who achieve sporting success.
One of its sponsors, Chuck Schumer, a Democrat who represents New York, said: ‘Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal. Most countries subsidize their athletes; the very least we can do is make sure our athletes don’t get hit with a tax bill for winning. After a successful and hard fought victory, it’s just not right for the US to welcome these athletes home with a tax on that victory.
‘We worked hard to pass a bill that would exempt athletes from these tax penalties in the Senate, and now I’m hopeful that this bill will earn strong bipartisan support in the House and quickly become law.’
