Tax-free Olympic glory
Friday , August 10, 2012 - 5:35 PM
Olympic athletes are very special people. But are they more special than, say, Nobel Prize winners, or police officers, or nurses, or spiritual gurus, or brilliant inventors or researchers whose discoveries enhance our lives? If an election year happens to fall in an Olympics year, yes.
Both presidential candidates have embraced an astonishingly silly but highly populist measure in Congress to exempt Olympic medalists from taxes, an idea that, naturally, originated with that bastion of silly but populist tax proposals, Grover Norquist’s Americans for Tax Reform. The U.S. Olympic Committee awards honorariums in the amount of $25,000 for each gold medal, $15,000 for silver and $10,000 for bronze, which means, Norquist’s group sputters, that a gold medalist would be on the hook to send up to $8,986 of his or her winnings to the IRS.
Never mind that the fact-checking organization PolitiFact ruled this claim "Mostly False," because any decent accountant could reduce that tax bite to as little as zero by deducting the expenses paid to win that medal, such as travel, uniforms, classes, payments to coaches, cost of equipment, etc. Republicans, with some Democratic support, quickly sponsored legislation in the House and Senate to make Norquist’s notion law, and last week the White House weighed in by saying that if Congress approves the bill, President Obama will sign it.
Why? There’s no legitimate tax policy reason. Politicians in both parties complain endlessly about the complexity of the U.S. tax code and its many needless loopholes, yet they’re only too happy to add to the complexity and drill another loophole in an election season when liberals and conservatives alike are rooting for Team USA in London.
If you’re going to make an argument for a tax exemption, the first requirement should be to demonstrate that the tax relief would have a stimulative or otherwise beneficial effect on the economy without significantly worsening the deficit. That clearly doesn’t apply here.
Forget about the brain, though; this bill is targeting the heart. Americans’ guts tell them that Olympians work very hard, most of them are amateurs, and their accomplishments should be honored rather than snatched by the IRS. Yet if we were to carve out exemptions for all the people who work hard, make sacrifices and sometimes achieve remarkable feats, the government would quickly go broke. Is an Olympian’s sacrifice in pursuit of personal glory really more noble (or worthy of a tax exemption) than a firefighter’s risk of life and limb in a dangerous rescue operation? Hardly, yet firefighter salaries are taxed at the same rate as everybody else’s.
This mindless bill should be rejected with the authority of a Kerri Walsh Jennings block.