Just because you are being unfairly screwed not all believe that everyone should be unfairly screwed.
Well I do. It’s not fair if we’re not all unfairly screwed.
Wouldn’t Olympic medals have appraised values of quite a bit more than $800? I suspect that people would probably pay much more than $800 on eBay for a genuine gold medal. When someone catches a record-breaking home run, they aren’t taxed on the $10 ball, but on the appraised market value of the ball.
I must have missed the part of Samplico’s post where he said he thought he was being screwed at all, let alone unfairly screwed. Maybe kanicbird will quote that part when he comes back. And bring pie.
Excise, value-added, ad valorem taxes are set at 0% when earned abroad or through export. That’s the rule for several countries (mine included.) Now when it comes to income tax derived abroad, its the host country’s prerogative to tax you. Your own country should not, maybe just transfer charges when bringing in your earnings from abroad.
Not in this case: the UK gives nothing for medals, so the athletes don’t have to pay any tax on them. So there! 
Another data point: South Africa pays R400,000 (about $50,000) for gold medals, meaning Chad Le Clos made twice as much money beating Phelps as Phelps would have had the results been flipped. Not that I imagine Michael Phelps needs any money.
If you want to be perfectly fair with the taxes, then the Olympic medal should be taxed at its market value, not its raw material value. If I enter a contest and win, say, a Salvador Dali painting, I’m not going to be taxed on the value of the ink and canvas - I’ll be taxed on the market value of the painting.
So how much is an Olympic gold medal worth? You’d have to look at all the ones that have been auctioned off or sold privately to establish a value. For example, American swimmer Anthony Ervin sold his Olympic gold medal for $17,100. Australian double-gold medalist Bobby Pearce’s Olympic memorabilia, including his two gold medals, recently went up for auction with a pre-sale estimate of £30,000 – 50,000. I think it’s safe to say that a really famous gold medal would attract a lot more money.
This is probably a very complex issue - you can’t know the value of the medal without looking at its context. A gold medal won in Berlin in 1936 might be worth a lot more than one from Tokyo. If an athlete wins multiple medals and therefore gains fame, the value of each one goes up. Hell, circumstances could drive up the value of a medal long after the athlete is home. So I’m not sure how you could figure out a new medal’s market value for taxation purposes.
I’ve heard stories about people winning big contests, being taxed on the merchandise’s new value, and then being unable to sell it for the amount of the tax and actually losing money. If average folks can get hammered by the tax man, so should Olympic athletes.
I agree with this. I can’t see a reason why it should not be taxed. Earnings are taxed. Prizes and awards are taxed. Why not this?
There is the fact that there’s a certain amount of national and political strutting over medals won, maybe they should be exempt as “we” take some of the credit for winning.
That’s a possibility. But I just wouldn’t tax the medals themselves. I’d tax the winnings. And if they want to raise the amount so the net take away is, e.g., $25,000, that’s fine. There’s not a lot of money involved here, so it’s not about revenue, it’s really about principle. After thinking about it, I think the difference between the Olympics and things like the Superbowl is that Olympic athletes are representing the country. Either way, I don’t really have strong feelings about it.
For any actual monetary prize, sure, that’s taxable income. Unless we start doing like other countries and make lottery winnings untaxable. For the actual medals, no, unless they sell it and then only tax it on what they sell it for. I think in general, physical prizes should not be taxed until they are sold, since you can’t break of 10% of a car to send to the IRS.
What countries make lottery winnings tax-free?
The UK, for one, unless things have changed.
Huh. So they do. I was there when the National Lottery started and I don’t remember that at all.
The difference is that the Olympic medal is worth more then its raw materials + labour because the Olympian won it. If the IOC struck a bunch of extra medals just to sell directly, they wouldn’t be worth more then a couple hundred bucks. People are interested in paying more for the medals because the medals were owned by an Olympian. The IRS doesn’t tax people for value they themselves add to a good.
After all, if Dali himself was given paints and a canvas as a gift, he wouldn’t have to pay thousands of dollars of taxes on them, even though he can turn them into a product worth that much. He’s the one adding the value, not the person who gave him the materials.
Or if I give Justin Beiber a toothbrush, he doesn’t have to pay hundreds of dollars of tax on it, even though he can probably turn it around and sell it to some shrieking fan for many times its original value. Its only that valuable because Bieber owned it.
This value of the medal stuff can get ridiculous. I imagine the hair on Justin Biebers head could be sold for thousands of dollars. Does he pay taxes on that? Well actually he’s Canadian so I guess it’s worth millions of [del]nutjobs[/del] [del]whackbrains[/del] loonies.
Do people who catch a famous baseball really have to pay taxes on it, even if they keep it? I thought they would only have to pay taxes if they sold it. I believe the term is unrealized capital gain (keep it) versus realized capital gain (sell it).
I’m fine with taxing olympian’s prize winnings as income. Why would the country do anything else?
They pay taxes on it when they sell it. It’s distinguished from winning something in that catching a baseball is legally considered to be claiming abandoned property, rather than accepting a gift.
I think this will be a first for me: supporting a tax. 
I admire everything these athletes do, but if you are a good carpenter or architect and get paid $25k because of what you did, you pay taxes on that money.
Before this started, I didn’t know that the USOC paid athletes a stipend for winning a medal. Sure that should be taxed. Why not?
ALL Gambling winnings in the UK are tax free so I don’t think there was an exception for it, it was just the law being applied. But equally, gambling losses are not tax deductable.
This was “before my time” but I understand at one time when you placed a bet at the bookies you had a choice of paying tax then on the stake of about 10%, or paying no tax and if you won then paying tax on the full winnings of the same figure. That was abolished before I was old enough to legally gamble.