This is true and I have absolutely no problem with it. The Nobel Laureate goes back to her existing job at a higher profile and higher salary and a job for life. The kayaker or water polo player has to start a career from scratch a few years behind his peers. A few bucks from us (much less than we get from our mortgage interest deduction) is fine by me.
I’m thinking along these lines especially since the medals and money come through different sources.
The value of the metal in the medals isn’t very much. The gold medals are silver cores, just plated with gold.
The gold medal is silver with gold plate.
I agree with almost everything you’ve said here except that the solution is a specific tax exemption.
I work in the tax field and I have to be honest with you: we’re already at a point where nobody can keep track of all this stuff. It’s easy enough to think of one exemption like this, but there are hundreds of exemptions like this. Special deductions for low-income performers, rural mail carriers, clergy, notaries public, manufacturing, software development, construction, real estate professionals… You can only load on so much crap before the system becomes unusable.
If we want to make sure the Olympic athletes are properly treated from a financial standpoint, then just pay them more. If $50,000 is subject to 20% in taxes, then pay them $62,500. That’s how you fix this problem.
I think the big problem of this tax break is that it’s only the medal winners who get it. Sends a rather ugly message of “we only like winners”. Most Olympians won’t come back with a medal, yet suffer the same disadvantages for their Olympic attempt as the winners do.
It’s basically the same outrage that people experience when they learn that winning a million bucks doesn’t actually mean that they’ll be getting a million bucks, or that when Oprah gives them a free car they might have to sell it to pay the taxes owed on the gift.
The Nobel Laureate spent decades in a poorly paid career (have you looked at the career trajectory of a scientist these days? PhD at about 30, postdocs paid at 40K per year for another 4-10 years. You’re 40 before you even have a chance to be an independent scientist.)
The kayaker is likely in his early 20s.
Apples and oranges.
That is the silliest argument. Do you think that the White House only deals with one issue at a time?
Nobel Laureates aren’t the average college professor. They’re probably a full prof at a major University in their early 30’s with a number of schools trying to recruit them.
Few Nobel laureates are in their 30s. For Medicine, Physics and Chemistry, their age averages in the high 50s.
Give me a break. Don’t play the SDMB pedant role.
Nobel Prize winners don’t toil in Sarah Palin’s schools until they get a great idea at 48 and get that job at a major research institute. They’re rewarded for a lifetime of research and discovery.
Yes. That’s exactly my point. You are comparing a 22 year old kayaker who has spent no time in any career to a 60 year old scientist who has spent decades in a career before eventually making some money by the time he reaches his mid 40s. When that 22 year old Nobel winning scientist was a 22 year old poor as hell PhD student and he won some pittance of a science prize, that prize money was taxed. That’s would be an apples to apples comparison.
You can’t give tax breaks on earnings that the other athletes didn’t get. They didn’t win medals, they didn’t get bonuses to pay taxes on.
Training expenses can already be used as deductions on your taxes.
We complainers are playing the role of the second lobster.
I think this is ridiculous. You compete for an olympic medal. How is it not income? You don’t compete for either a Nobel or a Pulitzer prize and they are logically just gifts from the awards committees and gifts are not taxable to the recipient. I don’t think they are taxed in Canada (but then neither are lottery winnings).
I’ll add to the “this is ridiculous” chorus. What problem is this exception trying to solve exactly? Are highly competitive athletes really forgoing the Olympics because they might pay some tax on the prize? I doubt that very much. Even if you were trying to claim that taking time off from work to practice and compete in the games is too onerous that would imply something like a tax credit for competitors as a whole, not for the small percentage that medal. But even that is silly.
This solves no problems, and adds complexity to an already complex tax code for no good reason. It is an obvious example of catering to the lowest common denominator (the voter that is supposedly impressed by this, not the Olympic athlete).
People who support this kind of thing are more concerned about the athletes on the low end, actually. Tax was due based on the value of the metals in the medals as well as on the cash prize. The result was that the cash prize might eaten up by tax on the medal and some people could actually wind up owing more.
As I said, I sympathize with the idea behind the issue, but the fix is to increase the compensation Olympic athletes receive, not to carve out a new exemption in an already bloated tax code.
Ah, I didn’t think about the tax on the medals itself. That makes this less ridiculous in my mind, but I agree with your preferred solution.
The Gold is only worth a few hundred. It’s gold-plated silver.
I agree with dracoi. The prize comes from some government regulation. If they want more to go to athletes, especially those with low income, just raise the prize instead of complicating the tax code with more exceptions. There is already a mechanism in the tax laws to give lower income a greater share of earned income.
This policy might hurt low income athletes anyway. By not counting the prize as earned income, low income athletes could miss out on the earned income tax credit and end up worse off as a result of this rule.
If the tax on the intrinsic value of the medal is a problem that needs to be addressed (and I seriously doubt that it is) then the appropriate response is to exempt the intrinsic value of the medal from tax. It’s not rocket science, people.