Sen. Marco Rubio introduced a bill Wednesday to eliminate the federal government’s tax on Olympic medals, saying the levy amounted to yet another way the government tries to punish those who succeed.
Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.
The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.
That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.
Mr. Rubio said that shouldn’t happen.
“Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness,” the Florida Republican said.
His bill would exempt the honorarium and the value of the Olympic medal itself from any federal taxes.
Congress is currently fighting over how to adjust the broader tax code and whether to let the Bush-era tax cuts expire. But Mr. Rubio said the Olympic winners shouldn’t have to wait until lawmakers finish that job.
“We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it,” he said.
As of Wednesday evening, the U.S. had collected 12 gold medals, eight silvers and nine bronzes — though a number of those were in team competitions.
So the men’s relay team that won gold in the 4x200 meter freestyle event would together owe nearly $63,000 to Uncle Sam for the four swimmers in the final and the three who took part in preliminary heats.
All told, U.S. athletes have 64 medals — 27 golds, 18 silvers and 19 bronzes — which comes to a tax bill of nearly $350,000.
Swimmer Ryan Lochte, the most-decorated American athlete so far, faces a tax bill of $23,357 for his two golds and a silver.
ATR, the group that crunched the numbers, said it’s unlikely any of America’s competition will face the same taxes because the U.S. “is virtually the only developed nation that taxes ‘worldwide’ income earned overseas by its taxpayers.”
Ok so I understand Uncle Sam wanting a cut, but seriously? That is an insane amount of money for being succesful and making the US look good on an international stage. $63,000 for winning a relay? Do other countries do this as well? I'm sorry that a teenager has to pay taxes on winning a race!
I read an article about this that stated that other countries, largely, do not tax Olympic winnings.
However, it's income. You get handed $25,000, you pay taxes on it. How is that different than winning in Vegas or the Lottery, or, for that matter, working at 7-11?
Income gets taxed. Olympic prize money is still income.
"That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S." - well, yeah, but they also have that large amount of money with which to pay those taxes...
Redbeard wrote:I read an article about this that stated that other countries, largely, do not tax Olympic winnings.
However, it's income. You get handed $25,000, you pay taxes on it. How is that different than winning in Vegas or the Lottery, or, for that matter, working at 7-11?
Income gets taxed. Olympic prize money is still income..
People get irked about this because the money wasn't earned in the U.S. (for American athletes), so why should the U.S. government get a piece of it?
As of right now, the government doesn't own us.
Redbeard wrote:However, it's income. You get handed $25,000, you pay taxes on it. How is that different than winning in Vegas or the Lottery, or, for that matter, working at 7-11?
Lottery winnings are considered a winfall and are not taxable in Canada... is it different in the USA?
But I completely agree with you: the athletes can easily pay the 8k in taxes out of the 25k they are awarded. You don't have to be a mathlete (see what I did there?) to figure this one out.
Also, it fits nicely with Romney's "Olympic athletes didn't get there on their own" speech, in that the athletes should have to give something back for the use of the government grants and training facilities.
Phanatik wrote:People get irked about this because the money wasn't earned in the U.S. ...
Er, it sounds like people are irked over this because they have conveniently forgotten that U.S. citizens working or living abroad must still pay taxes on their income.
Whether it was earned in or out of the US is kind of a silly distinction to make. If I invest in Pakistani Marble and make $50,000, sure the money was technically made in Pakistan, but I'm (I assume) as US resident using US services. I still get taxed.
That said, the Olypmics is one thing I could live without being taxed, but then I'll never go to the Olympics so maybe my opinion shouldn't matter
Unless they make laziness an event. I'd get at least a bronze for that one.
Redbeard wrote:However, it's income. You get handed $25,000, you pay taxes on it. How is that different than winning in Vegas or the Lottery, or, for that matter, working at 7-11?
Lottery winnings are considered a winfall and are not taxable in Canada... is it different in the USA?
But I completely agree with you: the athletes can easily pay the 8k in taxes out of the 25k they are awarded. You don't have to be a mathlete (see what I did there?) to figure this one out..
Part of the problem is that many athletes are still in school, and must comply with being amateur athletes. Receiving cash awards makes one a "professional" and so ineligible to participate in HS/collegiate sports.
Another part is that the medals themselves have an intrinsic value, which must be covered as well, since the U.S. taxes everything but oxygen.
Part of the problem is that many athletes are still in school, and must comply with being amateur athletes. Receiving cash awards makes one a "professional" and so ineligible to participate in HS/collegiate sports.
Are you arguing that they shouldn't have to pay taxes or that they shouldn't be given a monetary reward for kicking ass?
If an American WORKS in a different country, their wages(which wouldn't likely be in USD) should be taxed according to that countries laws, not the US's.
Basically you are telling me that if I move to Japan to teach English, I'll have to pay income tax here in the US on it? After all, my citizenship status remains American.
That is ludicrous. Also, why are we heavily taxing those who's only purpose is to promote a positive national image?
According to Market Place on NPR, the actual metal of "gold medals" is worth about $650 (obviously, there's not much real gold involved). I can't remember how much silver medals are worth but bronze was about $5.
Also, I'm not sure that winning a cash prize is the same thing as getting paid a salary to do a sport so I'm rather doubtful that successful Olympians are automatically considered "professionals."
Aerethan wrote:Also, why are we heavily taxing those who's only purpose is to promote a positive national image?
I don't think they think of that as their only purpose.
Also "professionalism" varies from sport to sport. Such a thing is highly regulated in US football or baseball, but gymnastics is a sport that is pretty much dominated by teenagers. Things like skiing, swimming, fencing, etc are not as hard about the limitations of participation in the sport as some of big money sports.
Blanket statements like that are kind of just, wrong, by their own nature.
LordofHats wrote:You know what the US doesn't tax? Hat wearing.
Part of the problem is that many athletes are still in school, and must comply with being amateur athletes. Receiving cash awards makes one a "professional" and so ineligible to participate in HS/collegiate sports.
Are you arguing that they shouldn't have to pay taxes or that they shouldn't be given a monetary reward for kicking ass?
Is that why you are the Lord of Hats?
I don't think they should have to pay taxes for income earned outside of the U.S.
I would say England has a more reasonable claim on the taxes.
If I may engage in Reductio ad absurdum, lets say I travel to Alpha Centauri and mow a little green man's yard for him. Why should the U.S. government get a piece of that simply because I'm a citizen?
How is it "punishing the successful"? They're still better off than they would've been if they didn't win the money, right? Seriously, how is this guy a successful politician?
U.S. citizens are required to pay taxes on any income, regardless of its source. Whether you agree with it or not, it's certainly not difficult to understand.
AlmightyWalrus wrote:Seriously, how is this guy a successful politician?
You mean how is the guy who relies on ignorance and anger a successful politician?
LordofHats wrote:Also "professionalism" varies from sport to sport. Such a thing is highly regulated in US football or baseball, but gymnastics is a sport that is pretty much dominated by teenagers. Things like skiing, swimming, fencing, etc are not as hard about the limitations of participation in the sport as some of big money sports.
Blanket statements like that are kind of just, wrong, by their own nature.
Did I step on your puppy? You seem...belligerent for some reason. Or are you overly fond of taxes?
Why don't you call up the NCAA and ask them if it's okay? I don't think they care either where the money was earned.
Remember, Romney made it clear that athletes benefited from the facilities and help of the american communities that send them to the Olympics, so why shouldn't they pay taxes on their winnings in order to help other athletes have the same chance.
But on a serious note:
It is income. You might talk about them being "amateur athletes" all you want, but they get paid for winning. That is income and should be treated as such.
Of course I would think that any athlete competing at the Olympics shouldn't have the slightest difficulty paying a much smaller share than is actually due. I would not be surprised if the cost for travel, lodging (for qualifiers), equipment, training, lessons, etc totals out to a pretty respectable number. Deduct that from the total winnings and I would be surprised if they still owed taxes.
But of course Marco Rubio is a Republican and is probably just trying to score some cheap political points by being anti-taxes.
U.S. citizens are required to pay taxes on any income, regardless of its source. Whether you agree with it or not, it's certainly not difficult to understand.
Aerethan wrote:If an American WORKS in a different country, their wages(which wouldn't likely be in USD) should be taxed according to that countries laws, not the US's.
Basically you are telling me that if I move to Japan to teach English, I'll have to pay income tax here in the US on it? After all, my citizenship status remains American.
That is ludicrous. Also, why are we heavily taxing those who's only purpose is to promote a positive national image?
You pay your taxes based on where you live, not where you work.
Manchu wrote:U.S. citizens are required to pay taxes on any income, regardless of its source. Whether you agree with it or not, it's certainly not difficult to understand.
AlmightyWalrus wrote:Seriously, how is this guy a successful politician?
You mean how is the guy who relies on ignorance and anger a successful politician?
This ignorance is on a level I'm not really used to, though. I guess I've overestimated humanity...
U.S. citizens are required to pay taxes on any income, regardless of its source. Whether you agree with it or not, it's certainly not difficult to understand.
Phanatik wrote:Did I step on your puppy? You seem...belligerent for some reason.
I don't have a puppy... Not anymore
Or are you overly fond of taxes?
No one is fond of taxes. Some of us just accept the reality of needing to pay them so society doesn't collapse into chaos and don't particularly care that a teenager who just made $25,000 has to pay 1/3 that to the big G. They're flipping teenagers. They just made more in a week than I make in a year.
EDIT: Oh holy snap. How much money did Michael Phelps make in 2008 XD.
Phanatik wrote:Did I step on your puppy? You seem...belligerent for some reason.
I don't have a puppy... Not anymore
Or are you overly fond of taxes?
No one is fond of taxes. Some of us just accept the reality of needing to pay them so society doesn't collapse into chaos and don't particularly care that a teenager who just made $25,000 has to pay 1/3 that to the big G. They're flipping teenagers. They just made more in a week than I make in a year.
EDIT: Oh holy snap. How much money did Michael Phelps make in 2008 XD.
Too bad about the puppy. As a life-long dog owner, I sympathize.
"Some" is right, as about 47% of Americans pay NO income taxes.
This is money they earned, Its no different from a porffesional athlete over her, make them pay If i have to pay taxes for flipping burgers on a grill they should aswell.
Difference is that flipping burgers on a grill probably means that when you file your income taxes you get all your taxes back (though honestly the government could really save us all time and money by finding some way not to tax people its just going to give all the money back to).
I've no issue for the Olympians not to be taxed on the medal and the "stipend" to earn it. Everything else yes I agree. How often are the olympics anyway. Its barely a drop in the bucket..more like a mist.
Well i actually dont get taxed, I just get paid less for working at a community college. But if it was anywhere else i would. I just feel that it wrong that just because they are at the olympics that makes them untouchable.
LordofHats wrote:Difference is that flipping burgers on a grill probably means that when you file your income taxes you get all your taxes back (though honestly the government could really save us all time and money by finding some way not to tax people its just going to give all the money back to).
And these athletes can also file taxes and get money back.
They would get a chunk back anyway even if they just filed their standard exemption. Or their parents will get a chunk back if they are under 18.
But like I said, if they deduct all their expenses for travel and training that got them to the Olympics, then I would not be surprised if they get every bit of it back.
I don't think the athletes pay those expenses, do they? I assume the US Gov pays them. Can you claim deductions for expenses you didn't incur yourself?
The most taxes I've ever done is getting $300 bucks back on crappy summer jobs
LordofHats wrote:I don't think the athletes pay those expenses, do they? I assume the US Gov pays them. Can you claim deductions for expenses you didn't incur yourself?
The most taxes I've ever done is getting $300 bucks back on crappy summer jobs
If the US government would actually pay for any of their expenses they might actually be able to complain about them wearing made-in-china uniforms.
But the athletes are pretty much self funded. Some compete in college and get help paying for their training that way, but a majority of them are on their own. They might have a job, but they train on their free time, pay for their own coaches, etc..
One of the Olympic wrestlers goes to my church and we took up a donation to help cover his expenses.
They didn't win those. Someone had to build the roads to get them to their training camps, string the wires nad generate the electricty that kept the lights on, pipe the water to the place so that they wouldn't dehydrate. We won those trophies, not them.
Frazzled wrote:They didn't win those. Someone had to build the roads to get them to their training camps, string the wires nad generate the electricty that kept the lights on, pipe the water to the place so that they wouldn't dehydrate. We won those trophies, not them.
Frazzled wrote:They didn't win those. Someone had to build the roads to get them to their training camps, string the wires nad generate the electricty that kept the lights on, pipe the water to the place so that they wouldn't dehydrate. We won those trophies, not them.
Yeah, that link already disproves it in the first sentence:
Close to half of U.S. households currently do not owe federal income tax. The Urban Institute-Brookings Tax Policy Center estimates that 46 percent of households will owe no federal income tax for 2011.
There's a big difference between not paying and not owing.
These figures cover only the federal income tax and ignore the substantial amounts of other federal taxes — especially the payroll tax — that many of these households pay. As a result, these figures greatly overstate the share of households that do not pay federal taxes.
Most of the people who pay neither federal income tax nor payroll taxes are low-income people who are elderly, unable to work due to a serious disability, or students, most of whom subsequently become taxpayers
Moreover, low-income households as a group do, in fact, pay federal taxes. Congressional Budget Office data show that the poorest fifth of households paid an average of 4.0 percent of their incomes in federal taxes in 2007, the latest year for which these data are available — not an insignificant amount given how modest these households’ incomes are; the poorest fifth of households had average income of $18,400 in 2007.[6] The next-to-the bottom fifth — those with incomes between $20,500 and $34,300 in 2007 — paid an average of 10.6 percent of their incomes in federal taxes.
When all federal, state, and local taxes are taken into account, the bottom fifth of households pays about 16 percent of their incomes in taxes, on average. The second-poorest fifth pays about 21 percent.[8]
The figure is substantially misleading.
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Frazzled wrote:
d-usa wrote:
Frazzled wrote:They didn't win those. Someone had to build the roads to get them to their training camps, string the wires nad generate the electricty that kept the lights on, pipe the water to the place so that they wouldn't dehydrate. We won those trophies, not them.
That's pretty much what Obama said.
Corrected your typo.
Actually, Obama said it about business people. Romney said it about Olympians.
Frazzled wrote:They didn't win those. Someone had to build the roads to get them to their training camps, string the wires nad generate the electricty that kept the lights on, pipe the water to the place so that they wouldn't dehydrate. We won those trophies, not them.
Romney has a great point about Olympians and Obama has a great point about businesses. None of us can do it alone. Why would you even want to? What an ugly, depressing fantasy to have.
No one is given money by the Olympics itself for winning an Olympic event. It is up to each individual country to reward it's Olympic athletes however it sees fit.
US athletes are rewarded by the United States Olympic Committee (which is a non-profit organization based in Colorado).
So, these are US Citizens, getting paid by a US organization, with US dollars.
Phanatik wrote:"Some" is right, as about 47% of Americans pay NO income taxes.
That oft-quoted fact doesn't seem to hold up. Someone pulled this on another forum and then couldn't back it up with data.
First of all, I reserve the right to express my opinion with absolutely no concern for producing one shred of evidence to support it. If it floats someone's boat (and they can do so) to produce evidence to refute my opinion, so be it. I'm a big boy and I can take it.
But just because I want to - I was referring to not paying federal income taxes, which is the point of this thread. This is from Forbes:
The truth is that most American adults pay federal taxes. The data point that Drudge has mangled here is that only about
122 million Americans pay federal personal income tax—and most who don’t pay other federal taxes.
Right, which is intentionally misleading every time it is brought up. Federal Income Tax doesn't include a host of other taxes. It is always brought up to show that some folks don't pay their fair share.
pretre wrote:There's a big difference between not paying and not owing.
Equating a statement that around 50% of people don't pay federal income taxes with that they owe taxes but aren't paying displays an error in discernment.
(Unless I worked for the IRS, I would not overly care who isn't paying the taxes they owed.)
pretre wrote:There's a big difference between not paying and not owing.
Equating a statement that around 50% of people don't pay federal income taxes with that they owe taxes but aren't paying displays an error in discernment.
No, it just means that the original facts say that almost 50% of people don't owe. Saying that they don't pay is a vastly different statement.
Not owing taxes means you weren't responsible for paying any taxes.
Not paying means you didn't pay any.
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Jihadin wrote:I wonder if I was included in that 47% of not owing taxes. Didn't pay taxes almost three years out of five years.
Did you not pay or did you not file? Big difference.
Hazardous duty. US military on deployment do not pay taxes while deployed (any taxes, some for obvious reasons). Mainly it refers strickly to payroll, as you don't get that deducted while deployed. When income tax comes around you get all of it back for the times you were deployed.
pretre wrote:There's a big difference between not paying and not owing.
Equating a statement that around 50% of people don't pay federal income taxes with that they owe taxes but aren't paying displays an error in discernment.
No, it just means that the original facts say that almost 50% of people don't owe. Saying that they don't pay is a vastly different statement.
Not owing taxes means you weren't responsible for paying any taxes.
Not paying means you didn't pay any.
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Jihadin wrote:I wonder if I was included in that 47% of not owing taxes. Didn't pay taxes almost three years out of five years.
Did you not pay or did you not file? Big difference.
Again, the only colloquial usage of the phrase "not paying taxes" that I am aware of only refers to doesn't pay, not that they owed but didn't pay.
Phanatik wrote:Again, the only colloquial usage of the phrase "not paying taxes" that I am aware of only refers to doesn't pay, not that they owed but didn't pay.
The majority of people who work in the US have taxes deducted from their check. They pay taxes. If at the end of the year you do not owe as much tax as you paid, you receive that back. Hence, almost everyone pays taxes. Not everyone owes taxes.
As well, some people who owe taxes do not pay them. I.e. they make income but do not file or file and do not pay the required amount.
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Jihadin wrote:lol well I filed all 5 yrs at once.
Chances are you then paid taxes but did not owe for those years.
Aerethan wrote:If an American WORKS in a different country, their wages(which wouldn't likely be in USD) should be taxed according to that countries laws, not the US's.
Basically you are telling me that if I move to Japan to teach English, I'll have to pay income tax here in the US on it? After all, my citizenship status remains American.
That is ludicrous. Also, why are we heavily taxing those who's only purpose is to promote a positive national image?
To provide a useful but dull answer, if you earn money abroad without being resident abroad for particularly long, then your earnings are taxed in your principal state of residence, because doing otherwise would be insanely cumbersome to administrate. If you went to Japan for more than a few weeks, and went with the intention of pursuing paid employment, then you would indeed pay taxes there instead, probably assessed at the local basic rate, without a personal allowance (the initial portion of your income which is untaxed). On your return to the US, however, you would be entitled to deduct the tax you had already paid from your US taxable income, meaning that you wouldn't pay any more, but neither would you be able to abuse the system by paying taxes in two states and thus claiming two sets of personal allowances.
The reason things like prize money are taxed (either as income or as capital gains, depending upon a state's tax laws) is that doing otherwise would provide an easily-exploitable loophole for tax evasion, by reclassifying earned income as such. And, to be honest, your athletes aren't being taxed 'heavily', they're being taxed at the standard rate. Presuming that US tax laws work like those over here, indeed, they, since they are engaged in a profession which pays in large, infrequent and irregular intervals, will be entitled to average their prize money income over a number of years, meaning that a college student athlete who is otherwise earning little or no income and thus paying no tax, will be able effectively to greatly reduce their taxable income by deducting from it several years' worth of unused personal allowances, and pay little or indeed no tax.
(My knowledge of income tax comes from having worked in the past as an excise inspector, a similar thing, but not quite the same, and is as such not guranteed to be perfectly accurate.)
Right, this is income, but when a company hides its money in the Cayman Islands, it's not income to be taxed.
And when a corporation, who is considered a separate legal entity, earns an income, it's not supposed to be taxed either, if you listen to Republicans.
Melissia wrote:Right, this is income, but when a company hides its money in the Cayman Islands, it's not income to be taxed.
I believe what actually happens is that the income earned by the corporation is taxed by the U.S. at the time that it is earned. What is left is then hidden away in the Cayman islands, where the United States does not have the jurisdiction to tax how wealth is invested and stored.
I don't remember (and never really learned) all of the intricacies but to the extent that corporation is a resident of the United States, its income is taxable by the United States.
Yeah, but that doesn't stop them from hiding it from the government as much as they can.
Corporations have a lot of incentives to commit criminal acts. The past two decades alone have had almost constant corporate corruption scandals, tax evasion scandals, corporate stupidity scandals, theft on a grand scale, etc. Year after year after year, more and more scandals.
Shadowseer_Kim wrote:I have a better question, why are winning Olympians given anying beyond a medal and fame anyways?
We believe that money is the natural right of a successful person, which in turn derives from the more fundamental belief that a gift of money is the universal means to encourage behavior that we like.
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Melissia wrote:Yeah, but that doesn't stop them from hiding it from the government as much as they can.
Yes, corporate culture has demonstrated consistently that it has only one goal: to make a profit for the ownership. This attitude has itself been enshrined into our law.
Melissia wrote:Right, this is income, but when a company hides its money in the Cayman Islands, it's not income to be taxed.
I believe what actually happens is that the income earned by the corporation is taxed by the U.S. at the time that it is earned. What is left is then hidden away in the Cayman islands, where the United States does not have the jurisdiction to tax how wealth is invested and stored.
This is indeed how tax havens work. Regrettably, there is simply no good way to resolve the situation, as forbidding one's citizens from doing what they wish with their assets would be regarded as remarkably illiberal, and, short of the use or threat of force, neither your government nor mine can forbid another sovereign power from structuring its tax system to attract offshore investors.
Manchu wrote:Yes, corporate culture has demonstrated consistently that it has only one goal: to make a profit for the ownership. This attitude has itself been enshrined into our law.
Right, which is why we currently have effectively no punishment for corporate corruption even though we do have punishment for lesser crimes.
Here it is, berry bonds, now how could I forget him
http://nbcsports.msnbc.com/id/20186528/ "That would instantly put Murphy, a college student from Queens, in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000 on a $600,000 ball.
Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to Barrie. Capital gains taxes also could be levied in the future as the ball gains value, he said."
I'm not sure why this is so polarizing... people weighed in from the very first posts with very strong opinions.
I don't think it's really a big deal. This is a drop in the bucket based on how many medals are won each year. Making them tax exempt would be a nice gesture.
Although I'm sure it being brought up was political, the actual issue is rather neutral, and pretty much irrelevant on a country scale.
Redbeard wrote:I read an article about this that stated that other countries, largely, do not tax Olympic winnings.
However, it's income. You get handed $25,000, you pay taxes on it. How is that different than winning in Vegas or the Lottery, or, for that matter, working at 7-11?
Income gets taxed. Olympic prize money is still income.
"That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S." - well, yeah, but they also have that large amount of money with which to pay those taxes...
Maybe Romney can have his accountant help them set up a tax shelter in the Caymans?
Manchu wrote:Income is taxed. Sentimentality doesn't justify carving out special exemptions.
Automatically Appended Next Post: EDIT: RedBeard rode the Sanity Train in right before me.
So Rubio wants to strike a blow against the complex tax code, by making it more complex?
By his logic income from winning the World Series or Super Bowl or pro poker should not be taxed either.
Or for that matter investing.
But wait the republicans also oppose taxing inheritance.
So no taxes if you work, no taxes if you're just lucky either.
We tax income, not 'success' because income is measurable and people with higher incomes can pay more without starving.
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RiTides wrote:I'm not sure why this is so polarizing... people weighed in from the very first posts with very strong opinions.
I don't think it's really a big deal. This is a drop in the bucket based on how many medals are won each year. Making them tax exempt would be a nice gesture.
Although I'm sure it being brought up was political, the actual issue is rather neutral, and pretty much irrelevant on a country scale.
Yeah but law should not be made on the basis of nice gestures. There's a larger agenda here of rebranding progressive income taxes as 'taxing success in the hope of lowering the rich's taxes and raising everyone else's.
Olympic athletes are being uses as pawns but politicians.
Phanatik wrote:
Part of the problem is that many athletes are still in school, and must comply with being amateur athletes. Receiving cash awards makes one a "professional" and so ineligible to participate in HS/collegiate sports.
During the year you are not paying taxes out of your paycheck. Your employer is withholding money that it sends to the IRS come tax time the following year. The IRS doesn't see a dime of your paycheck until the following year when all of your income is reported.
The exception to this is a levy, or if you have past tax debt that is paid from your check, but the latter is voluntary, the levy is not and is a collection action.
One thing that is interesting: look up a trust fund recovery penelty, this is a penelty from the IRS that is placed against a corporation or business, as well as all within the business who had a hand in using the money withheld from your check to be used to pay tax on your income at the end of the year for things other than taxes.
By the way as much as i hate to admit it, I work collections for the IRS, so I see this every day, and people always say "I pay taxes out of my check already!" To which I reply: "No, you have taxes withheld so you don't have to pay taxes next year."
And don't hate me because I work for the IRS, it pays....
Iron how does it work for us in the combat zone. Just wondering cause that would pretty much debunk the 47% thats being quoted (if we were added in on that)
Jihadin wrote:Iron how does it work for us in the combat zone. Just wondering cause that would pretty much debunk the 47% thats being quoted (if we were added in on that)
It's already been debunked. Go back and read pretre's posts. Everyone who doesn't owe taxes at the end of the year is included in that 47% number; including the guys in combat zones.
Manchu - no I agree with you there that we give money to people to encourage that behavior, work for instance, welfare often sadly.
But as I was saying there is plenty of incentive to go and do well at the Olympics besides a cash reward, so for this reason it seems rather unnessicary.
They're not doing it for the money. Glory is all. Give me a gold medal, and I'm not going to much give a damn whether it comes with $25k or $16k on the side. That's a bonus.
It's like selling painted miniatures. In either case, when you consider the hours (thousands upon thousands for the Olympians) invested, if you calculate the reward in terms of cash, either number becomes a pittance. The cash isn't the reason to do it, and it isn't the reason they do it.
Phanatik wrote:People get irked about this because the money wasn't earned in the U.S. (for American athletes), so why should the U.S. government get a piece of it?
Uh, for an Olympic athlete it's a full time, 365 days a year profession. They train and prepare all year around, and do most of this in government provided/subsidised facilities. That's why America has done so well at the game for so long - because there's a load of support for elite athletes that poorer countries can't match.
And all that time they're using the roads every other American uses. Relying on the same police services, and all the rest. That part of their job involved being overseas for 2 weeks doesn't mean they don't benefit from society.
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Aerethan wrote:If an American WORKS in a different country, their wages(which wouldn't likely be in USD) should be taxed according to that countries laws, not the US's.
Basically you are telling me that if I move to Japan to teach English, I'll have to pay income tax here in the US on it? After all, my citizenship status remains American.
Citizenship doesn't define where you get taxed, residency does. Residency is defined as a person taking up permanent residence in a place.
So if you moved to Japan to teach for three months, you'd be taxed on the money earned there when you went home (though you'd receive a tax credit for any tax paid while in Japan). On the other hand, if you moved to Japan without any deadline for returning, and took out a lease on a place, started filling it with furniture, and basically went about acting like Japan was where you lived now, then the US government wouldn't have any claim on that money.
The athletes went to UK for a fortnight, competed and went home. So no, they really don't qualify as residents of the UK during the period in which the medal was one.
That is ludicrous. Also, why are we heavily taxing those who's only purpose is to promote a positive national image?
Uh, you're flat out giving them money for winning a medal. Some of which is taken back in tax. How is a government penalty when they're paying more money
Also, the idea that athletes are doing it just for their country is silly. They're doing it because they love their sport, love to compete, and because success can net a lot of benefits in later life. Maybe patriotism comes a distant fourth for some of them. I mean, do you think Phelps was in the pool completing a strenuous training routine, and thought 'oh man I'd love to stop swimming, I'm so tired... but America needs me!' ?
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Phanatik wrote:I don't think they should have to pay taxes for income earned outside of the U.S.
I would say England has a more reasonable claim on the taxes.
So what you're saying is that you don't know anything about how tax law works, but you want to have an opinion on it anyway.
Go read about residency. Learn, and use that to develop an informed opinion of the subject.
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Manchu wrote:Romney has a great point about Olympians and Obama has a great point about businesses. None of us can do it alone. Why would you even want to? What an ugly, depressing fantasy to have.
mattyrm wrote:Considering they always go on to earn a couple million bucks once they get a gold medal, is it a big deal they pay a few grand on the actual medal?
Taxes should be fair across the board. If the athletes make money (and many are indeed making gobs of money) they should pay taxes at the same rate as any other person making that kind of dough. We'd scream is a multimillion dollar basketball player wasn't paying any taxes.
Phanatik wrote:People get irked about this because the money wasn't earned in the U.S. (for American athletes), so why should the U.S. government get a piece of it?
Uh, for an Olympic athlete it's a full time, 365 days a year profession. They train and prepare all year around, and do most of this in government provided/subsidised facilities.
Our government doesn't sponsor our Olympic athletes.
Melissia wrote:And when a corporation, who is considered a separate legal entity, earns an income, it's not supposed to be taxed either, if you listen to Republicans.
Crazy lefties that want to continuously raise the taxes received from corporations don't seem to understand (or just don't care, as the left never met a tax it didn't like) that the CUSTOMERS of those corporations pay the taxes thru higher prices.
Melissia wrote:And when a corporation, who is considered a separate legal entity, earns an income, it's not supposed to be taxed either, if you listen to Republicans.
Crazy lefties that want to continuously raise the taxes received from corporations don't seem to understand (or just don't care, as the left never met a tax it didn't like) that the CUSTOMERS of those corporations pay the taxes thru higher prices.
Only if that corporation doesn't have competition.
Bromsy wrote:I want all the taxes I payed whilst based out of Germany back then.
Rather a foolish thing to ask, since the alternative would have been to have been taxed by the German government at their domestic rate, which is notably higher than that of the US, despite the fact that, unless you planned to retire to Germany, you would never have benefited from their generous pensions, free (or heavily-subsidised) universities, free healthcare, etc.
The Mad Tanker wrote:Taxing the actual metals seems a little silly...
Unfortunately, the system has to work this way, since otherwise it would create an easily-exploited loophole for tax evasion by accepting payment in medals. The only way around it would be the passing of a law specifically to exempt Olympic medals won directly in competition. (It would need to be very specific and tightly-worded, of course, otherwise everybody would be able to trade precious metals tax-free simply by casting them into the shape of an Olympic medal.) Yes, tax evasion does get this petty.
sirlynchmob wrote:damn baseball references, I never remember those details. but a guy catches a baseball that broke some record about 3 or 4 years ago now.
This isn't the story I'm thinking of, but this guy owes $14,000 for catching a ball.
Same problem here, 'gifts' beyond a negligible level have to be taxed, or we'd all avoid taxes by paying/accepting payment in-kind. In this instance, however, one would think that it should have been within the IRS's power to exercise discretion, given the uniqueness of the event.
Jihadin wrote:Iron how does it work for us in the combat zone. Just wondering cause that would pretty much debunk the 47% thats being quoted (if we were added in on that)
Military members earning income in a combat zone earn that income tax free. That is why people in the Navy will try to re-enlist in a combat zone, so they get their re-enlistment bonus tax free (a freind of mine who was a nuke on our boat got a 105k$ tax free check while I was on the boat). The IRS also will suspend all collection action, and shelve a military persons account if they are in a combat zone if they have a balance owed from previous years, until they get back. Only thing is I am fairly certain "combat zone" is a loose deffinition of the term, because it covers a pretty broad area around any area where the US has a combat/peacekeeping role.
Phanatik wrote:
Crazy lefties that want to continuously raise the taxes received from corporations don't seem to understand (or just don't care, as the left never met a tax it didn't like) that the CUSTOMERS of those corporations pay the taxes thru higher prices.
Phanatik wrote:
Crazy lefties that want to continuously raise the taxes received from corporations don't seem to understand (or just don't care, as the left never met a tax it didn't like) that the CUSTOMERS of those corporations pay the taxes thru higher prices.
I don't see a problem.
We had a great real world example that shows just how stupid that argument really is recently. I think it was last year.
When congress let one of our many funding/appropriation bills expire last year they also let the funding for the FAA expire.
Which also meant that the taxes on the airlines & consumers expired. The airlines collect those taxes on tickets, but for a short time last year they were gone. $25 million a day that the airlines didn't have to send to the mean old government.
So according to the usual "taxes are being passed on the consumers!" argument we should have seen savings for all the consumers right?
Nope, instead of passing on the savings (if taxes get passed on to the consumers, then getting rid of taxes would be better for consumers right?) they raised their fares and kept the difference. Who would have thought....
Mannahnin wrote:Our government doesn't sponsor our Olympic athletes.
Of course it does. They don't have to be on the government payroll in order for government to give them a massive boost in training facilities and professional coaching staff.
Phanatik wrote:Crazy lefties that want to continuously raise the taxes received from corporations don't seem to understand (or just don't care, as the left never met a tax it didn't like) that the CUSTOMERS of those corporations pay the taxes thru higher prices.
No, it doesn't work like that. First of all, like fraz said your claim above assumes zero competition. It also assumes no price sensitivity on the part of the consumer. In any situation other than zero competition/zero price sensitivity (ie 99.99% of all markets) then the corporation's optimal response will only pass on some portion of the cost (the exact amount being dependant on market conditions).
Second of all, there's the issue that company tax is targetted at profits. A company will do anything to maximise profits regardless of tax policy, so if there is scope to raise prices on consumers to increase revenue, they will do that regardless of tax policy.
So, like you having complaints about tax policy despite having no idea how tax policy actually worked, you've also decide to complain about other people's economic policies even though you have no idea how economics actually works.
Mannahnin wrote:Our government doesn't sponsor our Olympic athletes.
Of course it does. They don't have to be on the government payroll in order for government to give them a massive boost in training facilities and professional coaching staff.
No, no Olympic athlete receives any funding from the US Gov. The USOC receives no continuous financial assistance from the U.S. government. As a non-profit organization, the USOC is wholly dependent on private contributions and corporate sponsorship. They are the ones that provide training and coaching.
There was a rather famous instance were the US ice skating team would be unable to attend due to lack of funds until they were sponsored by stephan colbert and the 'cobert nation'
Phanatik wrote:"Some" is right, as about 47% of Americans pay NO income taxes.
That oft-quoted fact doesn't seem to hold up. Someone pulled this on another forum and then couldn't back it up with data.
First of all, I reserve the right to express my opinion with absolutely no concern for producing one shred of evidence to support it. If it floats someone's boat (and they can do so) to produce evidence to refute my opinion, so be it. I'm a big boy and I can take it.
It appears no one else seems to have caught this gem, or, quite possibly - and reasonably - decided a sentiment this silly didn't actually merit refuting. But, just for the sake of completeness, I'd like to point out there is a difference between stating an opinion, and stating a fact. Stating that 47% of all Americans pay no income tax is not an opinion. Stating that "too many people don't pay adequate taxes" is an opinion.
Phanatik wrote:"Some" is right, as about 47% of Americans pay NO income taxes.
That oft-quoted fact doesn't seem to hold up. Someone pulled this on another forum and then couldn't back it up with data.
First of all, I reserve the right to express my opinion with absolutely no concern for producing one shred of evidence to support it. If it floats someone's boat (and they can do so) to produce evidence to refute my opinion, so be it. I'm a big boy and I can take it.
It appears no one else seems to have caught this gem, or, quite possibly - and reasonably - decided a sentiment this silly didn't actually merit refuting. But, just for the sake of completeness, I'd like to point out there is a difference between stating an opinion, and stating a fact. Stating that 47% of all Americans pay no income tax is not an opinion. Stating that "too many people don't pay adequate taxes" is an opinion.
That was the most random link I have ever followed on Dakka.
IMHO tax happens to all of us (apart from Gary Barlow... and Jimmy Carr), granted it is a large amount but the Olympics isn't about the money they win. It is simply about winning that Medal, if some money comes with it then all the merrier, no matter how much it is.
When I first heard about this I will admit I was pretty pissed at the thought of them getting taxed. Then I thought on it a bit, and realized, yea its the way things should be. I mean, 8grand sounds a little steep, is that higher then a normal tax rate? Its too early for me to really care enough to figure it out , but still, the athletes arnt going to care to much about the tax (Or shouldnt really) because in my mind, they care about the win, and not to mention Im sure they make a killing from endorsements once they do win a medal. That tax isnt going to matter once Wheaties comes calling.
What I find odd is that they are trying to class it as income earned overseas. The money comes doesn't come from the IOC or the UK, it comes from the US, and the athletes are not paying tax on it in the UK. It's not like the coaches or other support staff are paying UK tax whilst they are here.
Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.
The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.
That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.
$8,986 is roughly 27% of 25,000. That's a higher federal tax rate than I pay.
If a teenager earns $25,000, and has no other income that year, their tax debt is $2,549 (they can still claim a small standard deduction even if they are a dependent.)
http://www.irs.gov/pub/irs-pdf/i1040ez.pdf
Whoever is saying that kids are due to pay $8,986 are playing politics, plain and simple. The actual tax owed is much less. It is earned income, and they should contribute to the country like the rest of us do when we earn income.
d-usa wrote:We had a great real world example that shows just how stupid that argument really is recently. I think it was last year.
...
So according to the usual "taxes are being passed on the consumers!" argument we should have seen savings for all the consumers right?
2011 fuel prices averaged more than 20% higher than 2010, which had a big impact on the profitability of airlines (who mostly saw declines in value through the same period; American Airlines, for example, went bankrupt).
Google tells me that the US commercial airfleet consumes almost 50 million gallons of jet fuel each day. An annual 20% increase in fuel prices on 50 million gallons a day would completely obliterate the savings of the tax break.
The reason the "savings" was not passed on to consumers is because you were looking at a short period of time during which core margins were under significant strain. Over long periods of time, in competitive industries, all cost savings and increases are ultimately passed on to the consumer. In this particular case, the net increases were greater than the savings. That's why your real world "example" did not work, because it ignored other factors that were at least as significant as the one you observed in isolation.
Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.
The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.
That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.
$8,986 is roughly 27% of 25,000. That's a higher federal tax rate than I pay.
If a teenager earns $25,000, and has no other income that year, their tax debt is $2,549 (they can still claim a small standard deduction even if they are a dependent.)
http://www.irs.gov/pub/irs-pdf/i1040ez.pdf
Whoever is saying that kids are due to pay $8,986 are playing politics, plain and simple. The actual tax owed is much less. It is earned income, and they should contribute to the country like the rest of us do when we earn income.
If I were to get $25,000 check today I would have the same amount of tax withheld even though I am t a lower bracket. If you get a big wad of cash at once, you get a lot of taxes taken out at once. And it's not like the "kids" are having to go door to door selling magazines to come up with the money, they got a $25,000 dollar check to pay $8,000 with. And they will get almost all of that $8,000 back next year.
This whole affair is just pure political republican "successful people are being penalized with taxes" crap.
d-usa wrote:If I were to get $25,000 check today I would have the same amount of tax withheld even though I am t a lower bracket. If you get a big wad of cash at once, you get a lot of taxes taken out at once.
Does that apply to the case of these kids? Think about it, their not employed by the olympics, so they don't have their taxes deducted automatically.
Would it not be more like me giving you a $25,000 check for painting my army? At the end of the year you would to claim $25,000 income and send a check to the IRS. Again, the check would not be for 8 grand, it would be closer to 2 grand.
Edit : Unless the athlete already is in the highest tax bracket from endorsements. If their making over $250,000 a year in endorsements, they can fork out the 8 grand in taxes for this $25,000 earnings.
As someone previously mentioned, the endorsement opportunities the athletes will get will vastly outweigh the tax burden they must face.
d-usa wrote:This whole affair is just pure political republican "successful people are being penalized with taxes" crap.
I agree. Its a ploy to make Mark Rubio look like he champions our athletes and success. Its that simple. If the democrats vote against it, they can be strawmaned into saying 'they vote to punish success'.
No one is given money by the Olympics itself for winning an Olympic event. It is up to each individual country to reward it's Olympic athletes however it sees fit.
US athletes are rewarded by the United States Olympic Committee (which is a non-profit organization based in Colorado).
So, these are US Citizens, getting paid by a US organization, with US dollars.
How can this be considered not taxable?
Well put.
They were paid money, so now they pay taxes. After they show all of their business expenses associated with this payment (gym fees, specialized gear, trainers, travel, and so on), they'll get most of it back, anyway.
Just go here: 
