With the Summer Olympics in Rio de Janeiro five months away, a bipartisan group of senators introduced a bill Tuesday that would exempt Americans athletes from being taxed on medals or cash prizes won at the Olympics.
“We should extend a warm welcome and congratulations — not a tax bill — to our Olympic and Paralympic champions when they return to the United States,” Sen. John Thune, R-S.D., said in a press release. “The least we can do in return for these athletes’ commitment and patriotism is to allow them to keep what they’ve earned during the Olympic Games.”
The bill would also apply to American Paralympians. The athletes would still pay income tax on all other income, such as income from endorsement deals. Only the value of any medals and cash prizes would be exempt from their gross taxable income.
“Our Olympian and Paralympic medalists should be worried about breaking world records, not breaking the bank, when they earn a medal,” said Sen. Chuck Schumer, D-N.Y. “After a successful and hard fought victory, it’s just not right for the United States to welcome these athletes home with a victory tax.”
Along with Thune and Schumer, the bill is cosponsored by Sen. Cory Gardner, R-Colo., Sen. Kirsten Gillibrand, D-N.Y., and Sen. Johnny Isakson, R-Ga.
Given the small number of Olympians, the bill would have a negligible effect on the $3.3 trillion in tax revenue the federal government collects annually.
Thune introduced similar legislation before the 2014 Winter Olympics in Sochi, Russia. That bill had nine cosponsors but the Senate Finance Committee never took any action on it.
The bill itself is quite short. The most important section reads, “Gross income shall not include the value of any medal awarded in, or any prize money received from the United States Olympic Committee on account of, competition in the Olympic Games or Paralympic Games.” The bill would apply to all medals and prizes won in 2016 and later.
Jason Russell is a commentary writer for the Washington Examiner.
