The IRS Awaits US Olympic Winners

Poor US Olympic athletes.

Triumph from years of hard work will only mean that much of their earnings (seized) taxed away by the IRS.

From America’s Tax Reform, (bold original)

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.

At today’s commodity prices, the value of a gold medal is about $675. A silver medal is worth about $385 while a bronze medal is worth under $5.

There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

So how much will U.S. Olympic medal winners have to pay in taxes to the IRS?

	Medal Tax	Prize Tax	Total Tax Burden
Gold	$236	$8,750	$8,986
Silver	$135	$5,250	$5,385
Bronze	$2	$3,500	$3,502

American gold medal winners will pay the IRS up to $8,986. Silver medal winners will pay up to $5,385. Bronze medal winners will pay up to $3,502.

Of course add to the miseries of the world Olympians are the vastly reduced value of their medallions which I showed earlier.

Below is from the Economist,

Calculations by The Economist find that this is much more than the "podium value" of any previous gold medal (based on estimates of the composition of medals and bullion prices at the time, adjusted for inflation). This is partly because gold and silver prices are now historically high and partly because this year's medal is so much heavier, even though the extra weight is silver rather than gold. For the first time, the silver in this year's "gold" medal is actually worth more than its gold content. Moreover, if the metal content of earlier medals is valued at today's bullion prices, the London gold is worth only just over half of those handed out in 1912.

Yet the above signifies as evidences that governments barely reward the efforts and merits by their citizenry.