Schumer, Norquist on Thin Ice With Olympic Tax Break

The politicians would probably be better off just lowering everyone's taxes, rather than picking and choosing a few already lucky Olympic athletes to reward with tax cuts.


Mark Reis / ZUMA Press / Splash News/Newscom

When the senior senator from New York, Charles Schumer, and the president of Americans for Tax Reform, Grover Norquist, are on the same side of an issue in Washington, it's worth taking a moment to figure out what is going on. Schumer, a tax-and-spend Democrat, and Norquist, a small government, low-tax Republican, are usually policy foes. But when it comes to a special tax break for U.S. Olympic medalists, the two have emerged as unlikely allies.

Schumer this month launched what a press release from his office described as a "major push" to win passage of a bill known as the United States Appreciation for Olympians and Paralympians (USA Olympians and Paralympians) Act. The bill would make Olympic medals and the cash prizes that the U.S. Olympic Committee awards with them tax-free to U.S. Olympians.

Norquist's Americans for Tax Reform, meanwhile, is hosting a petition to "stop the IRS from taxing our Olympians." ATR warns that an Olympic Gold medalist could face as much as $9,900 in taxes on a $25,000 award from the U.S. Olympic Committee.

The Senate passed the tax break for Olympic medalists by unanimous consent on July 12. Sponsors of the bill included not only Schumer but also some prominent Republicans such as Senators John Thune (R-South Dakota) and Orrin Hatch (R-Utah). A companion bill awaits action in the House of Representatives.

I hesitate to get in the way whenever anyone is talking about lowering taxes of any kind. Even more so when the tax-cutting involves an unusual example of bipartisan cooperation.

But the more one gets into the reasoning behind this particular tax break, the more—well, to use an out-of season Winter Olympics metaphor—it looks like the senators and Norquist are skating on some thin logical ice.

This was brought to my attention by a post at the conservative website Hot Air that began, "Without the teeniest sense of irony, Sen. Chuck Schumer (D-NY) has proposed that America's Olympic medal winners should not have to pay taxes on the cash prizes they are awarded with their medals. Schumer's reasoning behind lifting the tax? Because 'hard work' and excellence shouldn't be punished. Seriously."

The point is that a whole lot of other income subject to federal taxation is also the result of hard work. Sen. Schumer seems to value the hard work of Olympic medalists enough to deem it worthy of tax-free treatment. But what about the hard work of the Wall Street investment banker or lawyer working through the weekend to close a merger or acquisition deal? Or of the plumber answering a call on a holiday weekend to fix a flooding toilet? Or a pro football player risking concussions, or a pro baseball player facing a 100-mile-an-hour fastball? What about the hard work of the surgeon who worked 90-hour overnight shifts as a hospital resident and fellow before breaking into the ranks of million-dollar earners?

In choosing a particular class of individuals whose hard work deserves to be tax free, Senators Schumer and Thune are engaging in a time-honored and troubling political game of picking favorites. When politicians established favored classes of those whose hard work gets better treatment than those of others, it not only adds complexity to an already egregiously complex tax code, it creates a beneficiary class of grateful recipients who now have politicians to thank for their special tax treatment. It breeds legalized corruption, as the beneficiary class then says "thank you" with campaign contributions or by hiring lobbyists with ties to the politicians who can keep the tax break on the books.

In choosing the "hard work" and "excellence" arguments to justify the Olympic tax break, supporters do touch on a key point about taxation; as much as possible, it should be crafted so as not to punish success associated with morally virtuous behavior. Yet even there, it's hard neatly to separate industry from plain luck. Olympic medalists worked hard, sure. But a lot of them also benefited from luck. I could practice all day and all night and I'll never swim as fast as Michael Phelps or run as fast as Usain Bolt. Those athletes have genes and bodies that, when work is added, permit them to achieve extraordinary things. Other athletes benefited from the good fortune of having parents who paid for coaching and lessons, or who had the time to drive their children to those lessons and to encourage them. Why should someone whose genetic gift is beach volleyball reflexes get a tax break, while someone else whose genetic gift is allocating capital or doing brain surgery pay full tax rates?

The politicians would probably be better off just lowering everyone's taxes, rather than picking and choosing a few already lucky Olympic athletes to reward with tax cuts. Good luck getting Sen. Schumer to back that idea, which would really be worth a gold medal.

NEXT: Watch a Former Federal Inmate Respond to Trump's Demagoguery on Commutations

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. You’re not nationalisming hard enough, Ira!

    1. Riley . if you think Scott `s comment is really great… on friday I got a great new Lancia when I got my cheque for $6472 this past five weeks and just a little over 10 grand this past-munth . it’s definitly the best-job I have ever had . I actually started 3 months ago and almost straight away started bringing in over $75 per-hour . see here …………… freedoms.top

  2. If the theory is “tax what you want less of” then shouldn’t they be taxing Olympic athletes like 110%?

  3. I think you could have found a Trump-angle here if you just put in a little effort.

    1. What’s a Trump-angle? Obtuse?

      1. Non-Euclidean.


      2. They give him what he wants and he bitches anyway. That’s the angle.

  4. In all fairness to Sen Thune, and others like him, does Ira expect him to vote AGAINST this proposal??? While I heartily agree that Schumer is almost as big a douche as Frau Clinton, and that this is just bullshit, it would be difficult to vote against it on principle. Now, hammering some of the Rs for not putting forth enough legislation to lower taxes across the board and I am with you.

  5. If you can’t make laws and rules that target specific people, why make laws at all?

  6. IIRC, we’re also the only first world country that taxes prize winnings in the first place.

    1. At this point can we finally put to rest the oft-repeated nonsense about how low American taxes supposedly are?

      1. I’m pretty sure many countries have people paying a larger portion of their income in taxes, on average, than the US. Which of course doesn’t make US taxes low. And as we all know, our corporate taxes are particularly high.

        1. I’m too lazy to look it up but I’ve seen someone here in these pages link to information stating that total Americans taxes are roughly in line with the major western European countries.

          1. After you include the money we spend on health insurance.

  7. the funny thing here is, Norquist– one could argue– is being consistent, or at least being more consistent in trying to keep the state’s ongoing criminal enterprise from raiding your earning. Schumer has picked this cause because *blank out* I have no idea.

    1. Because “Hey, people like Olympic athletes, and if i do something nice for Olympic athletes then maybe people’ll like me too.”

    2. Socialists do like to reward those who raise national prestige in their eyes.

  8. Government, picking winners and losers to make SJWs feel good about themselves.

    1. What does this have to do with SJWs?

      1. Some Jacked Wrestlers, dude. Trust me, you want those huge guys to not hate you.

        1. Those are the dudes in colorful thongs that spends hours a day getting all sweaty grappling and rolling around the floor with other dudes, right?

          1. Yes, and they will break you in half if you even hint that maybe that’s not the straightest thing since straight came to Straighttown.

            1. It’s exactly as hetero as a Guy Ritchie film festival.

      2. Nothing

        Been staring at drawings too long today

  9. Let’s pick more winners from a group of winners! What could possibly go wrong?

    1. It’s winners all the way down! So many winners, you’ll get bored of winners.

  10. Great article.

  11. No one else but me is going to be in their bunk in response to seeing four young, fit, world class women in wet spandex embracing each other?? You guys…I’m teh dissappoint.

    *slinks off to bunk

    1. Swimmers aren’t doing much for me. Especially with the caps and figure squishing swim suits.

      Track athletes seem to be the most attractively proportioned (to my taste).

      1. The hair always gets me w/ swimmers… I realize they spend 3-4 hours a day in chlorinated water, but all that bone dry, wispy, blown out hair just kills the buzz.

        And they also have better lats than me!

  12. Other people who are affected by these types of taxes are not on TV, so they obviously did not work hard or their achievements were not excellent. Also, they had the bad form to do it for personal advancement rather than the glory of the collective, would argue Schubert, I expect

    1. Fuck those Nobel laureates!

  13. Why do you hate America, Ira?

  14. Meh. I have to say, I’m about as outraged on this as the usual suspects are about wasteful spending. So far, the US has garnered 72 medals. Assuming they give up $10 k in taxes on each, we’re still talking less than a $1 million. We are literally talking less than ten seconds of federal spending. Yes, in theory, I’d rather give aeveryone a tax cut. But, I’m not going to lose sleep over this.

    1. A million here, a million there, pretty soon you’re talking about REAL money.

      1. Funny. I remember some commenters (not accusing you or any one person in particular) taking just that cavalier an attitude when the amount we were talking about was billions.

        1. I don’t even pay attention to anything less than trillions anymore.

    2. No, it’s not outrageous. Just fucking sad that no one in congress is saying (and putting up legislation): “hey, if it’s not fair to tax Olympians on their prizes, maybe we shouldn’t be taxing anyone on prizes that they win”.

      1. Perhaps. But, that sort of thinking might entail being responsible stewards of the public’s money on the spending side. And even a lot of people here have trouble getting worked up about the little unjustified spends. And, frankly, I have less problem with stupid not taking than I do with stupid doling out.

      2. People have a hard-on for athletes. They get special treatment in every other facet of life (e.g. in the immigration line), why not here too?

        1. People have a hard-on for athletes.
          Well, looking at those young ladies….

      3. “hey, if it’s not fair to tax Olympians on their prizes, maybe we shouldn’t be taxing anyone on prizes that they win”.

        If they’re dumb enough to play for the 50% take-out in the lottery, they’re dumb enough to pay twice…

    3. So, just another “tax expenditure”.

      1. Because not taking is giving and not giving is taking.

  15. RE: Schumer, Norquist on Thin Ice With Olympic Tax Break
    The politicians would probably be better off just lowering everyone’s taxes, rather than picking and choosing a few already lucky Olympic athletes to reward with tax cuts.

    No one should get a tax break. Instead, we should all demand an increase in taxes for the common good. We all make too much money as it is and should give 100% of our income to our wise and judicious socialist sociopaths who take the time trouble to make our every day lives more complicated and miserable. How else are we to enjoy the joys and wonders of a socialist totalitarian slave state if we do not allow our obvious betters to redistribute wealth they did not earn? They should be given all our money because they have been carefully indoctrinated in the finest re-education camps and have judiciously networked themselves into power and privilege to our detriment. Therefore it would beholden to all us little people if we have no money, no property and no businesses if the collective is to thrive and enjoy all the benefits of a socialist slave state. After all, you didn’t build that.

    1. Patience.

    2. I’m assuming this is intended as parody.

      1. Yes, Zeb, al my comments are sarcastic in nature.

    3. But if you are really going to do socialism fully, why should there even be such a thing as income or money?

      1. When I was a little kid learning about the evil Soviet Union, I was told about communism and how it’s supposed to work. I think it was being told to me by a teacher who was a socialist or something. They said that people were provided what they needed and gave of themselves in their work as much as they could. Then they said that their money was called rubles. I was thinking that it was odd for them to be communists, like it was described to me, and have money. Why would they have money?

        1. I remember being smarter than my teachers, too.

  16. Olympic athletes aren’t “already lucky”. They bust their asses to accomplish what they accomplish.

    That said, they shouldn’t get a special tax break.

    1. Actually, they may be lucky.

      There are a lot of people who busted their asses that miss on the payday by .001 of a second.

  17. United States Appreciation for Olympians and Paralympians (USA Olympians and Paralympians) Act

    Does this mean that if you have to pay taxes, you aren’t appreciated?

  18. I am making $89/hour working from home. I never thought that it was legitimate but my best friend is earning $10 thousand a month by working online, that was really surprising for me, she recommended me to try it. just try it out on the following website.

    ??? http://www.Today40.com

  19. Mr. Stoll, do you think not giving a tax exemption for Olympic medals will somehow lead to lowering taxes more broadly?

  20. Do athletes that don’t medal have to pay extra taxes? Bring it home or pay the consequences!

    1. Soooo, if they don’t medal, then they don’t get the associated cash prize, right?

  21. So then Military/Veterans should be tax exempt. They’ve put more on the line than training in a sport to win some medal.

  22. Social engineering or, in this case, vote pandering for the win.

    Kiss my ass Chuck.

  23. I can’t hate on Norquist, at least the guy’s consistent in trying to chip off whatever part of the country’s tax liability he can get his claws into.

    Schumer, obviously, is just pandering.

  24. Go ahead: give them the tax break.

    Then, talk about it. A lot.

    Let every American know that it’s all about fairness and equality, but, if you make a good case to the right congressmen, and you’re deemed worthy, they might just decide that you don’t owe taxes, either.

    Otherwise, pay up and shut up, dirt farmer.

  25. Holy f’ing stupid.

    Phelps made nearly a quarter million SWIMMING, and he needs a tax break?

    Look, either you tax imported income or overseas income, or you don’t. Make up your f’ing minds.

    1. A quarter million in less than SIX WEEKS…I should clarify.

  26. Molly . I can see what your saying… Samuel `s c0mment is unimaginable… last monday I got a great new Infiniti after bringing in $6142 this past month and-also, $10k lass month . without a question it is the most comfortable work I’ve had . I began this 5 months ago and straight away began to make over $81 p/h

    +_+_+_+_+_+_+_+_+ http://www.factoryofincome.com

  27. I am making $89/hour working from home. I never thought that it was legitimate but my best friend is earning $10 thousand a month by working online, that was really surprising for me, she recommended me to try it. just try it out on the following website.

    ??? http://www.NetNote70.com

Please to post comments

Comments are closed.