The Olympics is in full swing and America is, once again, raking in the gold medals. But while the athletes get to bring home the gold, apparently that also means Uncle Sam also rakes in millions of dollars in taxes.
No, really. Every Olympian who wins a medal must pay taxes on their winnings. You see, every medal also comes with a cash prize. The US Olympic Committee awards $10,000 for a bronze medal, $15,000 for a silver medal, and $25,000 for a gold medal.
And those numbers are, technically, “income;” which means, technically, the Olympians will have to pay taxes on their prize money. Now, gold and silver medals are made of mostly silver and bronze medals are made of mostly copper. Apparently, the medals at the Rio Olympic games, this year, are among the largest and heaviest of all time, containing roughly 500 grams of either silver or copper.
To make this a little more clear, a gold medal has a value of about $564; a silver medal has a value of about $305; and a bronze medal has only a “negligible” value, so it is not taxes.
You may not know this, but most most Olympians are already struggling to get by; which makes sense since they spend all of their time training (and not, for example, earning a steady income). Unfortunately, the United States is the only country that does not provide government funding to its Olympic athletes.
This is why a dozen or so try to get endorsement deals, as it helps not only earn an income but, more importantly, keep them afloat until they earn that gold medal (and the associated cash prize.
However, a new federal proposal aims to make “the value of any medal or prize money” [awarded at the Olympic or Paralympic games] tax exempt. So far, this bill has passed through the Senate and is currently under consideration in the House. If it passes, it will apply to Olympic medal earnings between January 1, 2016 and January 1, 2021.
This year, Senator John Thune, R-S.D., and Senator Chuck Schumer, D-N.Y., have sponsored the bill, with Schumer saying: “Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal,” in a statement last week.
However, it is also important to remember that other award winners—like the Nobel prize—are taxed; of course, they get approximately $1 million in prize money.