EoW November 2012

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November 2012 26
Taxing the Olympians
US medallists came back from London to a
hearty welcome home – but also with
hefty tax obligations
“When sprinter Allyson Felix returns home to Southern California
with her Olympic gold medal, she may have to share her good
fortune with her government.”
Writing in the Los Angeles Times on 10th August, Patrick McGreevy
was referring to the $25,000 honorarium that American Gold
medallists receive from the US Olympic Committee. It is subject
to both federal and state taxes, as is the $15,000 for silver
medallists and the $10,000 for bronze winners.
According to data from the US Olympic Committee, 93 medals
were won by US athletes who reside in California or list a
hometown in the state: 52 golds, 28 silvers and 13 bronzes.
These represent about 35 per cent of the total number of medals
won by US athletes. The taxes involved are not inconsiderable.
A gold medallist taxed at the California average rate of
5.8 per cent could pay $1,450 in state taxes on $25,000, state
o cials said.
Americans for Tax Reform calculated that the same gold
medallist would also pay close to $9,000 to the Internal Revenue
Service (IRS) in federal income tax, although some tax experts
say athletes could pay less after taking deductions for their
training expenses.
Writing two days before the close of the Olympics, Mr McGreevy
reported that a bipartisan group of state lawmakers wanted to
help Ms Felix and more than 30 other California medallists by
exempting the honorariums and the value of their medals from
state taxes.
The legislators were following the lead of members of Congress
who had proposed forcing the IRS to stay clear of medals
earnings.
“These Olympians are ambassadors for our country and our
state, and their sacri ces are often overlooked and taken for
granted,” said Assemblyman Allan Mansoor (Republican, of Costa
Mesa), adding that some athletes and their families “go through
severe nancial hardships” to nance their training.
But opponents of the bill sponsored by Mr Mansoor, which
would have exempted Olympians from paying taxes on their
medals, held that the winners were likely to eld lucrative
endorsement o ers on their return from London.
“I enjoy watching and honouring the Olympic athletes,”
Assemblyman Tom Ammiano (Democrat, of San Francisco), told
the Times. “But I think our tax focus should be placed on making
sure California’s budget burden is shared fairly. If California
wants to go for the gold, we could close tax loopholes now
enjoyed by the wealthy.”
In the end, Mr Ammiano’s view prevailed. On 16 th August –
four days after the spectacular closing ceremony in London
– the Senate Appropriations Committee shelved the Mansoor
measure. Some senators questioned the fairness of waiving
taxes on Olympic medals, given that champs in other contests
have to pay Uncle Sam on their winnings. Others suggested that
awarding tax breaks may not be the best thing right now, given
California’s current budget woes.
On leaving o ce in January 2011 the state’s former governor,
Arnold Schwarzenegger – who resumed his action-hero
Hollywood career with the opening of “The Last Stand” on 16 th
August – bequeathed California a $26bn de cit. His successor,
Gov Jerry Brown, has since whittled the shortfall to $9bn.
That is extraordinary progress, by any measure; but evidently it is
not enough to induce a tax-forgiveness mood in those charged
with closing the gap completely.
Telecom
The United States to the United Nations:
regulatory control of the Internet is in safe
hands with us, and will stay there
In a display of unanimity that would be remarkable at any time
– but especially within months of the US presidential election
set for 6th November – the US House of Representatives on 2nd
August voted 414-0 to notify the United Nations International
Telecommunication Union that the Internet does not require
new international regulations.
The House resolution calls on US government o cials to tell
the ITU and other international organisations that it is the
“consistent and unequivocal policy of the United States to
promote a global Internet free from government control.”
The lawmakers were serving notice that they strongly support
the status quo whereby several non-pro t US agencies oversee
the technical speci cations and domain name system of the
Internet. Independent of the US government, these agencies
nonetheless operate o cially under the control of the United
States Department of Commerce.
Transatlantic Cable
Image: www.bigstockphoto.com Photographer Zsolt Ercsel