Should U.S. Olympians Have to Pay Taxes on Their Medals and Prize Winnings? (As of Now, They Do)

Last week, Senator Marco Rubio (R-Fla.) introduced a bill that would exempt U.S. Olympic medal winners from paying federal taxes on their medals and prize money. "Athletes representing our nation overseas in the Olympics shouldn't have to worry about an extra tax bill waiting for them back at home," he said in a statement.

Under the current policy, Americans winning in London will add the value of their medals (around $650 for gold, $330 for silver, and $5 for bronze) and their prize winnings ($25,000 for gold, $15,000 for silver, and $10,000 for bronze) to their taxable income. At a 35% income tax rate, medal winners will end up owing the IRS around $8,750 for a gold, $5,250 for a silver, and $3,500 for a bronze.

Romney and a number of Congressional lawmakers from both sides of the aisle have jumped to support the measure. They, and many others, are appalled that these athletes who represent the United States are being penalized for their successes. However, others argue that Olympic medalists do not merit preferential treatment.

“The fact is that prize money from athletic victories is income, and there is no good reason for the government to treat that income differently than the income of all the non-Olympic athletes who earn analogous types of income,” wrote Conor Friedersdorf for The Atlantic. “Why should Olympic athletes be exempted from paying taxes on their prize money, but not professional golfers, or poker players, or winners of literary prizes, or folks who win the lottery?”

What do you think SodaHeads? Should U.S. Olympians have to pay taxes on their medals and prize winnings?