For how vaunted Olympic athletes are during the Games, the concept of a “victory tax” on on medals and cash winnings seems in poor taste. But in actuality, most American Olympic medalists take home everything they earn after a 2016 bill changed the tax law.
Thanks Obama. But seriously, thanks. He signed the bill.
What do Olympic athletes actually win?
Turns out it’s kind of a lot. Starting this year and continuing through the 2020 games in Tokyo, the US Olympic Committee awards athletes who win a gold medal $37,500, silver medalists receive $22,500, and $15,000 for bronze earners. This is a 50% increase from the Sochi Games in 2014, which saw athletes receiving $25,000, $15,000, and $10,000, respectively.
This amount is a lot when you consider that many countries, like the United Kingdom, don’t award medal recipients any cash prize whatsoever.
And then there’s a question of the value of the medals themselves. Nobody likes the thought of athletes selling their medals, but it does happen (usually for a good cause). On the open market, however, the value of the medals themselves is actually pretty low. This may shatter some dreams, but gold medals are reportedly just silver medals plated in gold. If they were fully gold, they would carry a value in the ballpark of $25,000. As it stands, they’re really worth more like $600. Silver medals are worth slightly less, and bronzes aren’t worth much at all.
What is the “victory tax”?
Before 2016, the awards Olympians received for medaling were taxed as earned income, much the same as gambling winnings or the bonuses standard corporate employees receive; roughly 37%.
Though for how Olympians are lauded as heroes, and earn these medals on behalf of their country, the concept of the “victory tax” seemed a bit gauche. After some public outcry, the rules were changed in late 2016 (and made retroactive to cover the winners at the 2016 Rio Olympics).
Based on the current rates, if there were still a victory tax, a gold medalist would owe roughly $14,000 to the government, which is not nothing.
How much do Olympians pay on their medals now?
The 2016 bill exempts athletes that earn less than $1 million in a given year from having to pay taxes on their Olympic earnings. So, high-profile athletes like Shaun White or Lindsey Vonn, who bring in massive coin every year on endorsement deals, will likely still be required to pay taxes on their earnings.