To be fair, this legislation puts some sort of limit based on income; Phelps is still gonna have to pay the taxes on his medal winnings because he makes a lot of cash.
OK, and I’m putting forth my view that I would like science incentivized over long jumping and asking whether others agree or not.
We incentivize science in many other ways, such as research grants.
Sure Nobel Prizes sb exempt. So should the actual Olympic Medal, IMHO.
This strikes me as pure animus against athletics. Incentivizing athletics does not come at the expense of incentivizing science. We can do both.
This hasn’t been the case since 1990. Tom Jager and other Olympians pushed for the change. However. Most Olympians don’t have an opportunity to have “training for the Olympics” as their full-time career. Tom was a top-level swimmer, in a popular sport that can support endorsements and stipends. Other, lower-level Olympians in less-popular sports may as well still be required to be amateur for all the financial aid they can expect.
I’ve been pretty clear that I think that all prizes should be taxed, so how is that animus against athletics?
But, for now, we aren’t doing both. We’re doing one. If we’re giving a tax break to a prize for being the best scientist OR being the best long jumper, then, personally I pick the best scientist.
And, AGAIN, we are not limited to a choice of tax breaks for either Olympic medalists or Nobel prize winners. We can do both.
I suggest that rather than trying to imply they are somehow exclusive, your time would be better spent suggesting to Congress that they carve out an exemption for your favored reward. That’s how the Olympic medal prize money exemption came to their notice, after all.
This law benefits a gold medalist who makes $500,000 a year about $5000 more than a gold medalist who makes minimum wage (the difference between nullifying a 35% tax rate and 15% tax rate on $25000). Doesn’t seem right to me.
A special tax exemption for athletes without one for military, social workers, fire fighters, teachers, or the child who wins the Scripps National Spelling Bee shows where our priorities lie.
I think all our time would be better off if all income was taxed as income.
I think your example about the tax benefit for the exemption being greater for the higher income really shows where our priorities lie.
There are pieces of the tax code that specifically benefit military, teachers and first responders already. Not sure if there are rules specifically targeted for social workers but there are many rules that they can already take advantage of. All children earn an exemption, not just the ones that win Scripps.
Your kids have to pay taxes on their allowance? Your wife? Issue 1099s at Christmas?
I think most people realize Jordan and Johnson don’t have typical financial situations for Olympic athletes.
The real problem is that the US taxes the income of its persons, no matter where it’s earned. It’s almost the only country which does so, and is the root cause of people and corporations hiding their money overseas. (Instead of bringing it back into the US and spending it here.)
Huh? So, let us say the US didnt tax the income of citizens living overseas- why would then Corporations bring their money back to the uSA?
That was no longer true by 1984. Some now make very good incomes, but the vast majority live like grad students.
In my particular sport, track and field, the median income of a national-level competitor (top ten finisher at the Olympic Trials) is less than $20,000/year. It’s not quite as bad when you get to the Olympic level and even less so when you cut it down to Olympic medalists, but some of those still make vanishingly small incomes. The USOC payout might double many medalist’s 2016 income.
I’ve had very boring and mundane taxes for all of my working life, but I’m guessing that a windfall like the above could raise all kinds of issues. That may have been the motivation here. But another might have been Congress wanting to look like it did something, anything.
No, it’s absolutely standard for countries to tax the worldwide income of residents. I’m an Irish citizen, but as I’m neither resident nor ordinarily resident in Ireland my only liability to Irish income tax is on my Irish-source income (which is a liability I would have whether or not I was an Irish citizen). I’m resident in (and a citizen of, but that’s irrelevant in the context) Australia, and I’m liable to Australian income tax on my worldwide income.
Where the US is unusual is in taxing the worldwide income of its non-resident citizens.