We all get a little light-headed watching the Olympics, as we feel awed by the athletes' amazing feats, inspired to get off the couch, and moved, even, by NBC's sappy profiles.
Then, most of us regain our senses.
But not Marco Rubio. The Republican Senator from Florida—and possible Mitt Romney's running mate—has introduced a bill to make prize money earned by U.S. athletes at the Olympics exempt from income taxes. The U.S. Olympic Committee, you see, awards winning athletes $25,000 for a gold medal, $15,000 for a silver and $10,000 for a bronze. The IRS considers winnings and prize money regular income. Rubio's Tax Exemptions for American Medalists Act (the TEAM Act—get it?) would make an exception for Olympic medalists, so they get to keep all the prize money.
The idea is populist and elitist at the same time, and raises numerous objections. First, Republicans are usually the first to complain about all the arbitrary loopholes in the tax code, while pushing for simpler and flatter taxes for everybody. Why make Olympians a special case? You can't keep carving out exemptions for favored groups if you really want to make the tax code fairer.
Exempting medalists is also wildly discriminatory. It favors winners over losers, for one thing, since those who come in fourth or lower wouldn't get any special treatment, even if they win prize money at some event other than the Olympics. The games supposedly embody the spirit of competing over the glory of winning, so do the winners really need even more special treatment than they get already?
A tax exemption for medalists would also be a tax break for millionaires who don't need it. Many of the top athletes, such as swimmers Michael Phelps and Ryan Lochte and soccer players Hope Solo and Abby Wambach, are already wealthy thanks to lucrative endorsement deals. Other Olympians, like teenage swimmer Missy Franklin, aren't wealthy yet, but probably will be before long.
Just about any athlete who wins a medal, in fact, stands to gain from the celebrity and exposure it brings, with exceptions, perhaps, for those who compete in obscure sports like kayaking or archery. When the anti-tax group Americans for Tax Reform estimated the typical tax payments for medal winners (which it said range from $3,502 for a bronze to nearly $9,000 for a gold), it used the highest tax bracket—35 percent—in its methodology. That's fitting. Anybody paying taxes at that rate typically earns at least $350,000 per year, which many U.S. Olympians do.
If we really want to come up with feel-good tax breaks for deserving Americans, we could certainly find people who could use them a lot more than Olympians at the peak of their abilities and fields. Most top athletes work indescribably hard, but many of them also enjoy privileges that allow them to make a career out of sport in the first place. They tend to have parents who can afford lessons and camps and trainers. They have access to expensive facilities like indoor pools and gymnastics arenas. Once they become successful, some pick up corporate sponsors who help finance their careers. The more privileges, the more of an edge you have, and the more medals you're likely to win.
If we want to offer rewards for people whose effort and accomplishment ought to inspire us, how about targeting the athletes who are devoted to their sports even though they have no hope of fame or fortune? The ones who make sacrifices nobody ever notices, simply for the love of what they do? Or the ones who made it to the medal stand without the benefit of wealthy parents or family connections?
For that matter, why not give an extra tax break to single working Moms or adults taking care of dying parents or anybody doing more than required, simply because it seems like the right thing to do? The Olympics can be a moving spectacle, but there are a lot of other Americans who give it their all, and might win a medal if any were offered. They're the ones at home watching the games on TV, keeping it all in perspective.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.