A $9,900 gold medal tax, also known as the Victory tax, implies that Michael Phelps owes the government at least $50,000 for picking up five gold medals at the 2016 Olympic Games in Rio, Brazil.
It is worth nothing that there is little of the pricey metal in the so-called gold medals given in Rio. The medal is made with only 1.2% gold, according to Victor Hugo Criado Berbert, production manager of the Olympic medals at the Brazilian mint.
Continuing with the math, the hefty $9,900 gold medal tax means during his impressive career, Phelps has forked somewhere around a quarter of million dollars for winning 23 gold medals.
As for Miss Simone Biles, she is set to give Uncle Sam at least $29,700 on tax day 2017. Americans for Tax Reform, which is an organization pushing to eliminate the tax, recently published a report that gives a breakdown of the amount of money awarded to athletes by the United States Olympic Committee when they win a medal.
An athlete – no matter the discipline – gets $25,000 for gold, $15,000 for silver and $10,000 for a bronze medal. According to the report, based on the top tax rate of 39.6% for the nation’s highest earners, a gold medalist will pay $9,900, the winner of the silver medal will fork over $5,940, and for the bronze medal, it is $3,960.
The American government also taxes the medals, but they are not worth much. Tax expert Blake Christian, a partner at Holthouse Carlin & Van Trigt, explained:
“Based on the commodity prices of the metals involved, gold is worth in the neighborhood of $600, silver about $300 and bronze next to nothing. What they’d go for on the open market is much higher, easily $10,000 or more, but that’s not a factor unless an athlete sells or otherwise disposes of the medal.”
Unlike American athletes, Congress is famous for failing at things, it attempted in 2012 to give Olympic athletes a tax break but the bill went nowhere. Sen. Marco Rubio, R-Fla., a former presidential candidate, who sponsored the effort, said back then:
“We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.”
This year, Sens. John Thune, R-S.D., and Chuck Schumer, D-N.Y., have teamed up and are pushing a Rubio-inspired bill. The democrats, who are hoping to eliminate taxes on Olympic and Paralympic athletes, were able to get it through the Senate in July. Schumer shaerd:
“Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal.”
While the taxes appear to be a lot, some of the top athletes can afford to pay thanks to their endorsement deals. Biles has a net worth of $2.1 million, Gaby Douglas is worth 3 million dollars Phelps’ net worth stands at around $55 million.