WASHINGTON: U.S. Olympic medal winners will soon get a tax break, but not everyone thinks getting rid of the so-called victory tax is a good idea.
“I promise you, this is bad policy,” said Rep. Jim Himes, D-Conn., who cast the lone vote against a bill that would block the IRS from taxing most Olympic winnings.
President Barack Obama is expected to sign the measure, which repeals a tax on cash prizes awarded to U.S. medal winners: $25,000 for gold, $15,000 for silver and $10,000 for bronze.
The measure sailed through the House and Senate, winning final approval Thursday just as Obama welcomed several hundred members of the U.S. Olympic and Paralympic teams to the White House. The U.S. won 121 medals at the Rio Olympics, including 46 gold medals.
A former college rower who once tried out for the U.S. national team, Himes said he has nothing against the Olympics or Olympic athletes. But he called the tax measure a “feel-good bill” that unnecessarily complicates an already complex tax code.
“What’s next?” he asked. “Tax exemptions for Nobel Prize winners? Astronauts? Inner-city teachers? This is no way to make tax policy: I feel good so I’ll give you a tax break.”
Supporters call the bill a matter of fairness.
Under current law, athletes who return home with a medal for Team USA must “pay a penalty for their success,” said Rep. Robert Dold, R-Ill., the bill’s chief House sponsor. The bipartisan bill “ensures that these athletes can remain focused on fulfilling their Olympic and Paralympic dreams without the fear of getting a huge tax bill in the mail,” Dold said.
Many countries subsidize their Olympic athletes, added Sen. Chuck Schumer, D-N.Y. “The least we can do is make sure our athletes don’t get hit with a tax bill for winning a medal,” he said.
The bill was amended in the House to allow taxes on high-profile athletes such as swimmer Michael Phelps who earn more than $1 million a year.
Himes applauded the change, but said the bill remains an election-year stunt.
“It’s an unpopular Congress trying to bask in the reflected glory of Olympic heroes. But it’s still bad policy,” he said.
While no other lawmaker voted against the bill, several have told him privately “I wish I’d been with you,” Himes said.
John Shaban, a Republican who is running against Himes, said the Democrat’s vote showed he was “disconnected from the sentiment of the country and the rest of the Congress.”
“Really is that how bad things are? That we have to tax the Olympic athletes on their medals,” Shaban told the Hartford Courant.
Himes and other Democrats “spend all their time beating up on the one presidential candidate who says how we never win anymore. And if we do win they’re going to tax you,” Shaban said.
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