By Josh Barro
Apparently, Olympic medals come along with cash honoraria -- $25,000, in the case of a gold medal. That's income, so it's taxable.
Florida Senator Marco Rubio (R) is very upset about this, so he has introduced a bill to make Olympic income tax-exempt. He says in a statement:
Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness... We can all agree that these Olympians who dedicate their lives to athletic excellence should not be punished when they achieve it.
Taxes are not punishment, and Olympians shouldn't get special tax treatment just because they are Olympians. Americans for Tax Reform has raised the issue that America is unusual in taxing its citizens' foreign income. But the Rubio bill is not about foreign income; it would apply even when the Olympics are held in the United States.
Rubio said just last week that America needs "real tax reform that simplifies the tax code." That's true. So why is he proposing to introduce a stupid new complication into the tax code? Tax reform means removing deductions from the tax code, not adding them.
Read more breaking commentary from Josh Barro and other Bloomberg View columnists and editors at the Ticker.-0- Aug/01/2012 22:36 GMT