Wherever in the world US citizens earn their money (even gold), they get taxed on it. US athletes competing in the 2016 Olympics will have to pay a charge on the value of every medal they win, as well as a deduction on cash bonuses they get for their achievement. The duty on the Olympic awards, dubbed the “victory tax”, has so far survived all attempts to have it demolished.
Senator Chuck Schumer from New York has previously tried, and failed, to pass legislation against the levy.
“Our Olympian and Paralympic athletes should be worried about breaking world records, not breaking the bank, when they earn a medal,” he said in a statement earlier in 2016.
“Most countries subsidise their athletes; the very least we can do is make sure our athletes don’t get hit with a tax bill for winning.
“After a successful and hard fought victory, it’s just not right for the US to welcome these athletes home with a tax on that victory.”
Mr Shumer’s proposed exemption for Olympic athletes passed in the US Senate but failed to win support in the House of Representatives.
The scrap value of a gold medal at Rio 2016 is about $564 (£437), Forbes estimated, while a silver one is worth approximately $305 (£236).
Athletes are also awarded cash bonuses for each medal. Americans who win a gold will get $25,000 (£19,400) , those who earn silver, $15,000 (£11,600) and those bronze, $10,000 (£7,700). They will get taxed on this, along with the value of their medals.
While the tax on each gold may not prove of great concern the likes of Michael Phelps, who is estimated to be worth $55 million (£43 million), Olympic glory does not always translate to a big income.
Training expenses alone can drain the wallets of US athletes. Just months before her daughter won two Olympic medals in London in 2012, Natalie Hawkins had to file for bankruptcy. Training an Olympic Gymnast can cost in excess of $12,000. “Gymnastics is an expensive sport,” Ms Hawkins said.
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