View Full Version : Victory Tax
What's more una-'Murican than a tax on victory! For such a "free" country that Is supposed to be a beacon of Liberty, there seems nothing the US does not tax. Win a Nobel Prize? There's a tax for that too....
She has flipped, tumbled and leapt her way into the hearts of millions over the course of the Olympic games. But when Simone Biles returns home she will be in for not just a major celebration but also a hefty tax bill.
The 19-year-old has won five Olympic medals - four gold and one bronze. She has cemented her title as the world's best gymnast by taking home the gold in the all-around after three successive world championship titles - a feat only accomplished by three others in history.
But all that winning will cost her. On 21 August, Biles could be slapped with a tax bill close to $43,560 (£33,479)
That estimate is based on the $2m that she has accumulated in endorsement deals and assuming she is charged in the highest income tax bracket in the US - 39.6%.
Biles is not alone, her fellow US medallists will be slapped with tax bills for their victories as well.
American Olympians are subject to a so-called "victory tax" - a tax on both the money they receive from the Olympic committee for winning and on the value of the Olympic medal.
What are they taxed on?
US athletes who win a medal at the Rio games will take home the hardware and a cash bonus from the US Olympic Committee.
Gold medallists will receive $25,000, silver medallists get $15,000, and bronze winners earn $10,000.
Those winnings are taxed as income, the same way Americans are taxed on other prize money, like lottery winnings. Most countries exempt their athletes from these taxes.
Cont:
http://www.bbc.com/news/business-37099066
I'm confused. Are they being taxed just for their victories, or on the income that they derive from the USOC, the income from their endorsement deals, and for the value of the medals they received (about $650 per medal)? How is it different than a pro football player being dinged for income tax for his Super Bowl winnings, his Super Bowl ring, and for his endorsement deals?
This doesn't come with a net cost to the olympic athletes, right? They just pay a percentage of the income they derive. Just like the rest of us?
And speaking of BS taxes, did you know the US is only one of two countries (the other being the African nation of Eritrea!) on the planet that tax US Citizens living outside the US making $ outside the US. Yes, if you live in another country and are making your income in that country, you STILL owe the US taxes. That is just f-ing disgusting in my view.
"One unique aspect of the United States’ tax code is that it taxes the income of all its citizens no matter where they live. In recent years, this has caused a lot of headaches for U.S. citizens living abroad, especially since the passage of FATCA. Many believe this is leading U.S. expatriates to renounce their citizenship.
The practice of a country taxing its citizens’ income no matter where they live is actually very rare in the world. The United States is one of just two countries (the other being the African nation of Eritrea) that taxes individuals’ based on their citizenship. Other countries mainly levy their income tax on those who live in the country, ignoring those who live elsewhere."
http://taxfoundation.org/blog/how-countries-define-their-income-tax-borders-0
Yeah, I don't see the issue here. How is it any different than anyone else who gets taxed on their purse winnings from competitions such as motorsports or golf tournaments?
Why should Olympians be treated any different?
I'm confused. Are they being taxed just for their victories, or on the income that they derive from the USOC, the income from their endorsement deals, and for the value of the medals they received (about $650 per medal)? How is it different than a pro football player being dinged for income tax for his Super Bowl winnings, his Super Bowl ring, and for his endorsement deals?
This doesn't come with a net cost to the olympic athletes, right? They just pay a percentage of the income they derive. Just like the rest of us?
Yeah, I don't see the issue here. How is it any different than anyone else who gets taxed on their purse winnings from competitions such as motorsports or golf tournaments?
Why should Olympians be treated any different?
Most countries exempt their athletes from these taxes it appears. I'd say post #3 is an example of taxation taken to ridiculous levels. Lets also remember most athletes there on their own money, unlike other countries who often pay for all their athletes training, travel etc. Yes, some of those costs can be written off by we all know write offs don't get anywhere near costs that went out. Me, I think there's something wrong here and I can't brush it off as simply taxable income for earnings.
But all that winning will cost her. On 21 August, Biles could be slapped with a tax bill close to $43,560 (£33,479)
That estimate is based on the $2m that she has accumulated in endorsement deals and assuming she is charged in the highest income tax bracket in the US - 39.6%.
$2M >> $44K that's less than 2.5% .. I wonder how they are figuring the 39% bracket.
Maybe this Victory tax is over and above Income tax? Or is it a discounted income tax from 39 down to 2.5% for the Victory payments but not the endorsements.
If it's 2.5% of each $25K win, I suppose that's not too bad... after all she didn't get there by herself. She didn't build the roads to the gym. She's Obama's child and didn't get there alone. She didn't build those parallel bars. If she were a true American she would donate 50% of her income to the Obama golf foundation.
Yeah, I don't see the issue here. How is it any different than anyone else who gets taxed on their purse winnings from competitions such as motorsports or golf tournaments?
Why should Olympians be treated any different?
I am kind of here. I shoot competitively and if I win over $500 it gets put on a 1099 and I am being taxed on it. I don't see any one else being any different. Now, the whole, you're a US citizen and don't live here, and don't work here, and don't earn a living here, well you still need to pay us, yeah, that is bullshit, but since the sponsorships are likely going to be happening in the US and they will be getting paid in the US, well I would say that they are just like anyone else at that point.
I know that there are differences in sports, but how many US athletes are there on their own dime? I was under the impression that USOC took care of the bill for getting the athletes there and all that jazz. I know when I was up in Colorado the USOTC was free of charge to athletes who qualified to train there.
As much as I understand the whole argument about BS taxes and am in 100% agreement with the argument that we are overtaxed and gain very little for paying our fair share, I am even MORE against creating special snowflakes that are exempt from the burdens of the unwashed masses. These people earned money in the form of income paid them by the USOC and their sponsors. How is that different from you and I making $$ from our jobs? Winning the lottery or inheriting Grandpa's diamond collection? It's not.
Sorry, but I don't see the issue. We need to have a UNIFORM tax code that applies to all equally so that everyone gets to feel the burn and everyone protests the loonacy of all these taxes.
Spurholder
08-20-16, 09:34
Doesn't matter - if Joe Average has to pay taxes for his Speed Queen washer and dryer combo that he won on "The Price Is Right," those Olympians have to pay their fair share, too.
Or we could reward our athletes like Robert Mugabe awards his athletes:
http://news.bbc.co.uk/2/hi/africa/7589297.stm
Most countries exempt their athletes from these taxes it appears. I'd say post #3 is an example of taxation taken to ridiculous levels. Lets also remember most athletes there on their own money, unlike other countries who often pay for all their athletes training, travel etc. Yes, some of those costs can be written off by we all know write offs don't get anywhere near costs that went out. Me, I think there's something wrong here and I can't brush it off as simply taxable income for earnings.
I'm still not convinced.
One, I don't really care what other countries do. If we modeled ourselves by other countries, we'd be that... just another country.
Two, EVERY amateur athlete/competitor that pays their own way to compete in a golf tourney, motorcycle race, car race, 3-gun match, or whatever, still has to claim their winnings. Olympians are no different.
Wait... Actually they are different. They get exposed to massive television coverage & huge endorsements with the potential to make millions, while the peon Saturday night flat-tracker who's paying his own way AND still paying taxes on his winnings, might get a name drop in the lower left corner on page 3 of the local paper.
They're all red blooded Americans, living under the same laws of the land, with the same competitive drive to kick someone else's ass. Why should they be held to a different standard?
Most countries exempt their athletes from these taxes it appears. I'd say post #3 is an example of taxation taken to ridiculous levels. Lets also remember most athletes there on their own money, unlike other countries who often pay for all their athletes training, travel etc. Yes, some of those costs can be written off by we all know write offs don't get anywhere near costs that went out. Me, I think there's something wrong here and I can't brush it off as simply taxable income for earnings.
Hmmm...the US Tax Code certainly has some oddities and inequities, but generally speaking the US tax burden for its citizens is pretty low by comparison to the rest of the developed world.
http://www.taxpolicycenter.org/sites/default/files/3.1.4-figure1.png
Every time I read about taxes I am reminded of this scene from that awful movie Popeye with Robin Williams:
https://www.youtube.com/watch?v=g0ahJPxfGp4
Hmmm...the US Tax Code certainly has some oddities and inequities, but generally speaking the US tax burden for its citizens is pretty low by comparison to the rest of the developed world.
I'm not claiming otherwise, but some seem arbitrary and dare I say it, downright un-'Mericun. As much as tax on earnings is essential to a nation that wants roads, etc, an exception for something tantamount to national service would hardly hurt the national coffers for example. Taxing people not in the US not making a dime in the US, is just fu$#ed.
I think that the opinion of "something tantamount to national service" is where we differ. I have won money as an archer (a few hundred bucks and paid taxes on it), but my form of archery (compound) is not in the Olympics. I highly doubt if I made it to the Olympics back then I would have considered it anything near "something tantamount to national service".
Many of these athletes are or were on full ride college scholarships and had some of the best coaching in the world available to them for free. I don't see any difference between these athletes and a full ride math student that goes out and makes millions later. They need to pay taxes on their earnings just like the rest of us.
Do I agree with the U.S. tax code. No way in Hell, but it's an entirely different subject.
I'm not claiming otherwise, but some seem arbitrary and dare I say it, downright un-'Mericun. As much as tax on earnings is essential to a nation that wants roads, etc, an exception for something tantamount to national service would hardly hurt the national coffers for example. Taxing people not in the US not making a dime in the US, is just fu$#ed.
Soldiers pay taxes -unless they are deployed to a combat zone - I would consider everything they do, stateside or overseas, national service.
I'm proud of all our Olympians, but I think they benefit from our (taxpayers) largese well beyond what they are taxed on winnings.
Call me a hippie, but repping your country by being better than everyone else in the world at something should be tax exempt.
I'm not claiming otherwise, but some seem arbitrary and dare I say it, downright un-'Mericun. As much as tax on earnings is essential to a nation that wants roads, etc, an exception for something tantamount to national service would hardly hurt the national coffers for example. Taxing people not in the US not making a dime in the US, is just fu$#ed.
Slippery slope. What about our military personnel? That's not just tantamount, that's actual national service. Do they not pay taxes?
Anyway, those athletes still garner a net monetary gain. Their tax burden is only a percentage of what they earned, just like the rest of us.
I think the athletes are being taxed on the money they win. A gold medalist receivers $25,000 along with the medal. $15,000 for silver and $10,000 for bronze. So if Biles won $110,000 paying $44k is a lot but sort of falls in line with the tax rate. No?
So we punish excellence? The country gets to brag about the medals and the accomplishment and the athlete gets punished for succeeding?
A lot of these people come from humble means and could use that money for good education or a nest egg when their athleticism catches up with them physically.
I dunno. I think its a gyp, personally.
Slippery slope. What about our military personnel? That's not just tantamount, that's actual national service. Do they not pay taxes?
Anyway, those athletes still garner a net monetary gain. Their tax burden is only a percentage of what they earned, just like the rest of us.
Those are good Qs and comments, but lowering the tax rates for those who serve as a one way to support them would not bother me in the least, though I'd favor increasing their pay, medical benefits, etc first. The issue is, is not that the athletes pay what everyone else pays per se, but whether everyone else is getting screwed too. I'd suggest the latter. Never gonna happen, but a total paradigm shift in the topic needs to take place in my view.
So we punish excellence? The country gets to brag about the medals and the accomplishment and the athlete gets punished for succeeding?
A lot of these people come from humble means and could use that money for good education or a nest egg when their athleticism catches up with them physically.
I dunno. I think its a gyp, personally.
In this country we punish excellence every...single...day. There's nothing special about olympic athletes that should make them immune other than the excessive news coverage. For a little while.
So we punish excellence? The country gets to brag about the medals and the accomplishment and the athlete gets punished for succeeding?
A lot of these people come from humble means and could use that money for good education or a nest egg when their athleticism catches up with them physically.
I dunno. I think its a gyp, personally.
So the world's best Indy or NASCAR driver shouldn't be taxed on their purse winnings either?? Or maybe it should depend on their economic status when they were growing up?
Sorry bud, gotta disagree with you on this one.
I'm owning this. Yes, NASCAR and Indy drivers get exenptions too except for Jeff Gordon who gets a %500 tax for being Jeff Gordon
This is why so many Formula1 drivers live in either Monte Carlo or Switzerland despite being born in England, Spain, Germany or Brazil. When you are making $10M-$50M per year, not having to pay taxes is a big plus.
This is why so many Formula1 drivers live in either Monte Carlo or Switzerland despite being born in England, Spain, Germany or Brazil. When you are making $10M-$50M per year, not having to pay taxes is a big plus.
This. If I ever get able to run fast enough to win the Indy 500, I am on the first plane to Monaco living like a Lady Gaga video before she sold out
Those are good Qs and comments, but lowering the tax rates for those who serve as a one way to support them would not bother me in the least, though I'd favor increasing their pay, medical benefits, etc first.
Will, I'm probably gonna be the Lone Ranger here, but my standard of living substantially dropped when I left active service after my first enlistment.
You cant pay someone, or their family enough to be killed or wounded and disabled, I would prefer to do something more for those circumstances.
This. If I ever get able to run fast enough to win the Indy 500, I am on the first plane to Monaco living like a Lady Gaga video before she sold out
You would have to renounce your US citizenship tho. Based on what I learned in this thread you would still have to pay taxes. Those guys get a pass cause they are citizens of European countries. Monte Carlo won't grant them citizenship but they can live there.
Edit:
Makes me wonder something. I worked with a Structural Engineer who had a friend that got an 18month contract to work on site for a construction project in Dubai and I was told he did not pay taxes. This is third party information, but the story doesn't jive with what Will said. Maybe he didn't pay taxes in Dubai but still had to pay US taxes?
IMHO military pay should never be taxed at all !!!!!
olympic gold medal folks ? well tax em cause if they play smart chances are they will make more than most all of us here !!
working living outside the US ? no tax but if you come back money you are up is hard to say since chances are it was taxed over seas already ?
but to many would work this OH WAIT companies already do this like apple etc..
Averageman
08-21-16, 02:22
You would have to renounce your US citizenship tho. Based on what I learned in this thread you would still have to pay taxes. Those guys get a pass cause they are citizens of European countries. Monte Carlo won't grant them citizenship but they can live there.
Edit:
Makes me wonder something. I worked with a Structural Engineer who had a friend that got an 18month contract to work on site for a construction project in Dubai and I was told he did not pay taxes. This is third party information, but the story doesn't jive with what Will said. Maybe he didn't pay taxes in Dubai but still had to pay US taxes?
Unless he cheated, he paid.
I've work outside CONUS a couple of times, the tax thing gets tricky and yes you may have a portion of that as untaxed income, but the way it is worked you pay and pay and pay.
I have a tax guy who specializes in working with these laws and he is pretty good at taking every deduction he can get you, but it is still painful.
HansTheHobbit
08-21-16, 05:30
My family knows by now to never get me started on taxes.:mad: I've engaged in some epic rants, usually profanity laden.
My biggest beef is with the hidden taxes. It's not enough that they take 40% off the top of your paycheck, but then they take another 10% whenever you have the audacity to make a purchase with what's left of your money. Most insidious of all, however, are the taxes we don't pay directly, but are paid by our employers on our behalf, or by the companies who make the products we buy.
Not only do we pay the sales tax, but the price of goods has all kinds of taxes built in. The raw materials are subject to tariffs when they come into the country, then there are taxes at every level of production, such as payroll taxes, etc. By the time the product actually gets to us, it's been taxed at multiple level, both directly and indirectly, especially if it generated any carbon whatsoever.
Then there's the gas tax. The price of fuel plays a huge part of what we pay for goods, and fuel is heavily taxed.
Then we have property tax, which is essentially the return of feudalism. If you look at it realistically, you're basically renting your property from the government, and if you fail to pay then they will push you off your land at gunpoint. So not only do they rob you of equity from your investment, but they get their cut regardless of how well your investment does. Sounds an awful lot like feudalism to me.
Overseas income is tax exempt up to about $100,000 if you stay out of the country for 330 days, FYI.
Phelps worth $40 mil. Lochte worth $9 mil. Simone Biles at 19 is worth $2 mil. Until Rio, I'd never even heard of her.
They need to pay taxes, sorry.
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To start with, looking at the tax policies of the USA verse a bunch of socialist countries is dumb unless the goal of all Americans is to live in a" socialist paradise".
I think it would be nice for the IRS to give a tax exemption on the medals and the bonus they get from the Olympic committee.
But if they get endorsements, this income should be taxed.
Regarding income earned outside of the USA, it is a joke.
The corporations and very wealthy have structured themselves up in such a way to avoid being taxed on overseas income. You can avoid taxes without giving up your citizenship.
OK, first off I didn't read every single post so maybe this has already been brought up.
If I am taxed on my non-US income by a foreign country, I can claim a foreign tax credit on my US tax return against my US tax liability so that I only pay taxes once (in the US) on the $ earned.
https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit
Here's a novel thought: rather than creating a new tax that's going to piss people off when they merely hear the name of it, why don't we just call it "income tax"?
I'm all for chipping in my share for roads, schools, defense, etc. What the IRS doesn't get is it's not the FBI, nor is it a tool for politicians to use against the public, or specific people. They should just collect the tax period, and a flat tax at that.
Averageman
08-21-16, 08:14
Overseas income is tax exempt up to about $100,000 if you stay out of the country for 330 days, FYI.
You kind of need to look at the way they do that.
Yes you don't pay taxes on that first 100K, but everything after that the rate is pretty high.
I'm guessing here, but I believe you may not pay tax on that first 100, but everything after that is taxed as if you already made that hundred. Your bracket is adjusted.
I leave this up to an accountant who is also my tax guy, so it's not like I turbo taxed it those years. Having been audited once and having paid the penalty if you find yourself in this situation don't screw around get an expert.
Depending on your Company they may also figure your housing and meals as part of your income if they were provided while you were working OCONUS. It's been enough to make me stop, do some math, call my guy and when he did the numbers pass on at what at first glance appeared to be a lot of money.
HansTheHobbit
08-21-16, 10:38
Here's a novel thought: rather than creating a new tax that's going to piss people off when they merely hear the name of it, why don't we just call it "income tax"?
I'm all for chipping in my share for roads, schools, defense, etc. What the IRS doesn't get is it's not the FBI, nor is it a tool for politicians to use against the public, or specific people. They should just collect the tax period, and a flat tax at that.
Amen!
Don Robison
08-21-16, 10:53
And speaking of BS taxes, did you know the US is only one of two countries (the other being the African nation of Eritrea!) on the planet that tax US Citizens living outside the US making $ outside the US.
Not exactly true, England charges income tax on income earned abroad based on whatever agreement they have with each country and it's not automatic, you have to file for a refund on double taxation. I'm sure there are more; I just found that in a quick google search.
That said, I agree with that it's disgusting..
I'm confused here...she is being taxed because of income...should football players who make the draft not be taxed? I mean, I hate taxes, too, but she shouldn't somehow be exempt.
The media has run with this as it is some sort of special tax levied against those athlete only. That's complete bunk. It's just getting taxed against their income just as if any other American was just handed 25grand.
As for the impression that most of these athletes come from humble/poor backgrounds. That isn't always true. NBC does a good job digging up the backgrounds to make interesting personal stories to fill the gaps during air time. Buffy the volleyball player from Middleincomeville, MA that went on a full ride to Yale doesn't make as good of a story as Biles who was adopted away from her druggy mom by her grandparents.
Yeah, this is ordinary income tax on prize winnings. No different than being taxed on any other dollar you earn. The media really has made this appear to be something other than that, when it's not.
Do I feel that the tax code is a bit unfair? Yep...
Do I feel like this is an example of that unfairness? Nope...
And speaking of BS taxes, did you know the US is only one of two countries (the other being the African nation of Eritrea!) on the planet that tax US Citizens living outside the US making $ outside the US. Yes, if you live in another country and are making your income in that country, you STILL owe the US taxes. That is just f-ing disgusting in my view.
"One unique aspect of the United States’ tax code is that it taxes the income of all its citizens no matter where they live. In recent years, this has caused a lot of headaches for U.S. citizens living abroad, especially since the passage of FATCA. Many believe this is leading U.S. expatriates to renounce their citizenship.
The practice of a country taxing its citizens’ income no matter where they live is actually very rare in the world. The United States is one of just two countries (the other being the African nation of Eritrea) that taxes individuals’ based on their citizenship. Other countries mainly levy their income tax on those who live in the country, ignoring those who live elsewhere."
http://taxfoundation.org/blog/how-countries-define-their-income-tax-borders-0
I'm fine with taxing the sponsorships, but not the medals. That's just tacky.
As for taxing American citizens earning AND living outside the U.S. based on citizenship, it makes more sense when you consider us subjects. Sure, we can still vote at politicians back here in the states, but how are they representing us and making laws that matter in a foreign country? Come to think of it, didn't we dump some tea in a harbor once because our king was taxing our earnings from across the ocean? :confused:
wilson1911
08-21-16, 19:22
I get paid by commission, but it called a bonus....or in other words a percentage of each ticket. This is where the bulk of my income is derived from. This falls under the "luxury tax" in the code. The fed gov takes a flat 40 % of this. I also have a state tax of 8%. The tax code is complete bullshit. As far as I am concerned everyone should be paying this percentage...especially the politicians. I still have not figured out what % they pay.
I'm just an oilfield worker...who pays a higher percentage than hillary or donald.
At this point in my life, I think everyone should be taking the same ****ing I am.
Most taxes are just communism lite anyway
HansTheHobbit
08-22-16, 07:56
I get paid by commission, but it called a bonus....or in other words a percentage of each ticket. This is where the bulk of my income is derived from. This falls under the "luxury tax" in the code. The fed gov takes a flat 40 % of this. I also have a state tax of 8%. The tax code is complete bullshit. As far as I am concerned everyone should be paying this percentage...especially the politicians. I still have not figured out what % they pay.
I'm just an oilfield worker...who pays a higher percentage than hillary or donald.
At this point in my life, I think everyone should be taking the same ****ing I am.
Considering that most politicians derive their wealth at the taxpayers' expense (hillary cough cough), the better question would be, How much do they have to give back? Paying taxes doesn't hurt so much when it's stolen money to begin with.
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