Why We Need Tax Reform in Black and White - Actually in Gold, Silver, and Bronze!

Imagine spending five to six hours a day in a pool for the better part of a decade, honing your aquatic skills to the point where you earn a spot on the U.S. Olympic Team and then achieving what a scant few have throughout the history of the games – a gold medal.

First come the throngs of interviews, the inevitable appearances on The Tonight Show and Late Night with David Letterman, and perhaps your image on a box of Wheaties. Then, when the excitement eventually wanes, your mailbox contains a bill from the IRS asking for a payment of $8,936 as a result of your dedication and untold miles in a self-contained rectangle.

No, that’s not a misprint.

Olympic medal winners are subject to taxes – including $5,385 for those earning the silver and $3,502 for bronze, according to figures supplied by the lobbying group Americans for Tax Reform. True, Olympians who win medals also receive an honorarium in the form of cash payments of $25,000 for gold, $15,000 for silver and $10,000 for bronze and, like bonuses or stipends, those are subject to taxation.

But still, something doesn’t seem right.

As a result, Sen. Marco Rubio, R-Fla. (and my betting favorite for Mitt Romney’s VP pick) has introduced The Olympic Tax Elimination Act, legislation that would exempt medal winners from paying taxes on their precious – if you’ll pardon the obvious homophone – “metals.”

Rubio said that athletes representing their country should not have to worry about a tax bill waiting for them upon their return.

Okay – to be fair, the top medal winning athletes in the so-called glamour sports probably will receive enough largesse in subsequent endorsements to meet their tax obligations out of pocket change. But what about the winners in events that don’t draw as many headlines or fan interest as would  a Michael Phelps, a Ryan Lochte or America’s newest sweetheart – Gabby Douglas?

Should they get tagged for nearly $9,000 for winning an item valued at roughly $675? Even the tax-obsessed United Kingdom has exempted their athletes from paying taxes on their winnings at the games.

I know spotlighting the tax obligations of a biennial event (if you count the Winter Games) seems an arcane argument for tax reform, but it seems neither hopeful for the Oval Office in 2012  has been willing to debate it in any great detail, instead focusing their energies and leanings pro and con on tax breaks.

But whomever emerges victorious in November would be well advised to give tax reform more than cursory attention because either one is going to find the Oval Office mighty crowded with an elephant in the room.