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Congress makes bipartisan effort to exempt Olympians from taxes on winning medals

Discussion in 'The OT' started by fluffybear, Aug 4, 2012.

Should Olympians being exempt from paying tax on a honorariums for winning medals

  1. Yes - On both medals & honorariums

    0 vote(s)
    0.0%
  2. Yes - Only on their medals but not honorariums

    22 vote(s)
    43.1%
  3. No - Have to pay tax on both

    17 vote(s)
    33.3%
  4. Not sure/No opinion

    12 vote(s)
    23.5%
  1. Rich

    Rich DBSTalk Club DBSTalk Club

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    Yesterday or the day before, the NY Daily New put the tax on a gold medal at $25,000 and then, in the same issue, listed the actual worth of the "gold" medal at between $600 and $700 dollars. What is the IRS basing that $25,000 on? The silver medal should be about the same worth in metal, the bronze medals a bit less.

    Rich
     
  2. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Gee, that applies to Social Security benefits too, so I shouldn't have to pay taxes on them nor should Warren Buffett.:D
     
  3. trh

    trh This Space for Sale

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    I wonder how many millions we spend each year collecting taxes from people receiving their pay from taxes and then how much is spent filing taxes and reviewing those tax returns?
     
  4. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    Northern...
    The difficulty is that for some that government income isn't their only income. Again, as I posted above, an impoverished old widow, me, and Warren Buffet all receive Social Security. I really don't think we ought to pay the same marginal tax rate percentage on every dollar we earn. I just don't believe in exempt income (or deductions).

    What I get from the discussion here that many consider the athletes' income should not be taxable earned income, earned from hard work like most of us.
     
  5. armophob

    armophob Difficulty Concen........

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    I read it wrong. The medal is not the cash. They get a $25k bump along with the medal.
     
  6. RunnerFL

    RunnerFL Well-Known Member

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    I'm all for taking care of, and rewarding, our Olympic Athletes but I don't think they should be tax exempt. As someone already pointed out a great percentage of them come from "well off" families, or they couldn't afford the training and equipment, and will wind up making more money in a year than I will my whole career.
     
  7. Rich

    Rich DBSTalk Club DBSTalk Club

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    Ohhh. That explains everything. I guess that's the "honor" thing? The extra 25K? I must have misread the News article. Now I understand. Hell, Yes! Tax them.

    Rich
     
  8. Drucifer

    Drucifer Well-Known Member

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    NY Hudson...
    Where do you draw the line for monetary awards? Once you let one group getting it untax, everyone getting a cash award for an achievement will have a case that they too deserve not to pay taxes on the award money.

    Now as to the physical award, I always felt those should be tax free because it really doesn't have any monetary value until you try to sell/donate it.
     
  9. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Emotionally taxing athletes who represent and promote the USA seems like a low blow. But when you divide the athletes into two categories, the rich with plenty of income where the amount of taxes they will pay on the honorarium is barely a blip on their finances and the poor who don't make enough to pay taxes I don't see the issue.

    Take two of the top medal winners (so far). One has won four golds and two silvers this year, making the honorarium $130k. The next has won four golds and a bronze making the honorarium $110k. The difference between these two athletes is what they do outside of the sport. The first makes at least $6 million per year in endorsement and appearance payments - the other has turned down endorsements so she can remain an amateur in college.
     
  10. Tom Robertson

    Tom Robertson Lifetime Achiever DBSTalk Club

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    Well said, James.
     
  11. Shades228

    Shades228 DaBears

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    College students who have jobs pay taxes. In fact how many people can say they made 110k a year, working that is not having hedge fund investments make capital, while going to college?

    Income is income and honestly they should feel lucky to make money by doing something they love rather than making frappacino's at starbuck's.

    Maybe I'm just a cynic but to me the Olympics do not represent our country. Sure we can spend the most money to train the athletes to get the most gold medals but does that make our education system better than the countries who don't get a medal?

    As with everything else the Olympics have changed from what it was even 20 years ago.

    This is a political ploy in an election year that impacts such a small amount of people that it can be gotten away with.

    Imagine the same parties saying that teachers in public schools shouldn't have to pay taxes for instance. It's a joke bill for good press that people buy into. Don't agree with it and you can become easy fodder for negative ads.
     
  12. Herdfan

    Herdfan Well-Known Member

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    Teays...
    Allow the medals to be tax-free until they sell them. At that point they need to be taxed. The honorarium is really no different that endorsements.
     
  13. Stewart Vernon

    Stewart Vernon Roving Reporter Staff Member Super Moderator DBSTalk Club

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    Social Security is a different horse... It is essentially pre-tax investment that you get to withdraw later in life. Now I know the system doesn't work as originally intended where you invest and your money stays your money... rather the current working crop pays for the current retirement crop now.

    But the gyst of it is still the same... you are investing pre-tax dollars so you can cash in later... so then that Social Security payment/withdrawal later should be taxed as the income that it is.

    Note that I would like to get rid of income tax for all and have higher sales tax... but the above is a statement based on the status quo.

    True... but then the other income can and should be taxable. Work a government job and a second job at Wal-Mart? Tax the Wal-Mart income, but not the government income.
     
  14. armophob

    armophob Difficulty Concen........

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    I was not giving a thumbs up to taxing these kids

    I was acknowledging my misunderstanding of how the government sees them as taxable

    i went through 4 years in the AF and still shake my head at the fact that my tax dollars that helped to pay for my service were taxed as well before I got paid
    Kind of like that old flag with the snake with its tail in its mouth
     
  15. Rich

    Rich DBSTalk Club DBSTalk Club

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    I cannot remember paying income taxes when I was in the Navy. I don't think I did.

    Rich
     
  16. 4HiMarks

    4HiMarks Hall Of Fame

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    OK, then. What about government contractors? Most of their company's income is derived from taxes, so that means any salary they earn is tax-based as well.
     
  17. 4HiMarks

    4HiMarks Hall Of Fame

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    A lot of people make that error. SS is a mandatory, government-run, insurance policy against becoming old and destitute. Your FICA deductions are insurance premiums, and any benefits you collect are "claims."
     
  18. 4HiMarks

    4HiMarks Hall Of Fame

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    As to the Olympians being taxed on their medals, I think they should be treated no differently than people who win other sports championships (Super Bowl, NCAA, etc.), Nobel prizes, or Academy Awards. The medal, ring, trophy, plaque, what have you, should not be taxed unless you try to sell it, but any monetary award should be taxed as ordinary income.
     
  19. BattleScott

    BattleScott Hall Of Fame

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    But that would just lead to more paperwork in other areas.
    What about federal employees who are under the 401K plans now instead of the legacy pension system? How would they be able to contribute "pre-tax" dollars to their health care coverage plans the same as their private sector counterparts?
    How would you treat the individual employees differently in terms of deductions and expemtions? College credits, enegery dedusctions, etc. etc. etc.
    What you would end up with a separate system for federal employees that would basically require knowing all the answers to their correct tax laibility up front in order to provide the correct pay for the year. This would be extraordinally wasteful since they can just use the existing system.

    Having typed all that, I am completely surprised it does not exist!

    As for taxes:

    Honorariums - Income averaging over 4 years, since that earning potential does not exist for another 4 years
    (Single gold = $6,250.00 added to the AGI for next four tax years)
    Medals - applicable sales taxes
     

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