WARM HOMECOMING

US Olympic champions will come home to endorsements and parades—and a hefty tax bill

Obsession
Rio 2016
Obsession
Rio 2016

US Olympic athletes put in blood, sweat and tears for one tangible goal—winning a medal. The lucky few who go on to win a gold, silver, or bronze return home as heroes.

But there’s more to Olympic medals than multi-million endorsement deals and hometown parades. Most countries exempt their citizens from taxes on their Olympic winnings. But not the US, where Olympians are some of the few in the world faced with a so-called “victory tax.”

In the US, Olympic prize winnings are like striking it big at the lottery—they are taxed as income. Not only are they taxed on their money—the US Olympic Committee awards $25,000 for each gold medal, $15,000 for silver, and $10,000 for bronze—they are also taxed on the value of the medals themselves. Gold medals are worth close to $600, silver medals around $300, while bronze medals are only valued at $4, the BBC reports.

Feel bad for Michael Phelps—who won five of his 23 golds in Rio—and Simone Biles, who won four golds.

The group Americans for Tax Reform suggest their tax bill would be 39.6% on their combined value of the medal and cash prize as they are in the top tax bracket. This means that Phelps, Biles, and other US Olympic medal winners face a tax bill of $9,900 for a gold medal, $5,940 for a silver, and $3,960 for a bronze. Biles and Phelps tax bill would be even higher as they’ve both won multiple medals—the latter to face an estimated tax bill of $55,000.

A number of US lawmaker are planning to or have proposed legislation that would stop the IRS from taxing US Olympic medalists for their victories. Back in 2012, the senator and former Republican presidential hopeful Marco Rubio introduced the Olympic Tax Elimination Act, which would exempt US Olympic medal winners from this tax burden.

Senator John Thune and congressman Blake Farenthold have gone on to introduce their own versions of Rubio’s bill, while New York assemblywoman Nicole Malliotakis plans to introduce similar legislation.

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