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Congressional delegation races to support exemption on Olympic bonuses

Posted Aug. 07, 2012, at 7:27 p.m.

Poll Question

Chellie Pingree
Chellie Pingree
Mike Michaud
Mike Michaud Buy Photo

AUGUSTA, Maine — Maine’s congressional delegation burns with the Olympic spirit, at least when it comes to legislation that would exempt U.S. athletes who win Olympic medals from paying federal income tax on bonuses they receive for their accomplishments.

The U.S Olympic Committee pays an honorarium to U.S. athletes who win medals. A gold is worth a $25,000 bonus, $15,000 for silver and $10,000 for bronze. The committee accepts no government funding. Instead, it relies on private and corporate donations, as well as endowment funds from the U.S. Olympic Foundation, which was created with the profits from the 1984 Los Angeles Olympics.

Amid media reports about financial woes experienced by the families of gold-medal winning gymnast Gabby Douglas and gold-medal winning swimmer Ryan Lochte, an IRS policy that taxes the bonuses as income became the playing field for political gamesmanship.

On Aug. 1, Republicans introduced versions of the Olympic Tax Exemption Act in both the U.S. House and U.S. Senate. Republican Sen. Marco Rubio of Florida, frequently mentioned as a possible running mate for presumptive GOP presidential nominee Mitt Romney, submitted the Senate legislation as S. 3471.

On the same day, Rep. Aaron Schock , R-Ill., introduced the measure as HR 6267. Within 24 hours, the House bill had gained 33 co-sponsors, including Rep. Ron Paul of Texas, another Republican presidential candidate.

The legislation would apply to medals won after Dec. 31, 2011, meaning that the only Mainer affected would be rower Elle Logan of Boothbay Harbor, a member of the eight-women crew team that won a gold medal in London.

Maine’s congressional delegation weighed in on the measure Tuesday. All expressed support for U.S. Olympians and for legislation that would exempt them from paying income tax on the medal bonuses. Some also took the opportunity to promote tax reform agendas.

First out of the blocks was 1st District U.S. Rep.Chellie Pingree who issued a release stating that she will co-sponsor the legislation.

“Many of these athletes have struggled and sacrificed for years as amateurs and very few of them are raking in big endorsement fees,” Pingree said in the release. “These athletes are a great source of pride for the U.S., and I think the least we can do is give them a little bit of a tax break on what they get when they win a medal.”

After being contacted by the Bangor Daily News, Ed Gilman, a spokesman for Rep. Mike Michaud, a Democrat who represents Maine’s 2nd District, said Michaud has joined the list of House co-sponsors.

“He thinks all options should be on the table as Congress moves forward on tax reform,” Gilman said. “In addition to Olympians, thousands of middle class families in Maine need to have their tax cuts extended.”

Maine’s two U.S. senators also expressed support for the measure.

“The Americans who earn a medal and reach the zenith of sport reserved only for the world’s finest athletes truly embody the highest ideals of the Olympic Games,” Sen. Olympia Snowe, who is traveling in Europe, said in a statement. “An honorarium recognizing that unparalleled commitment to excellence certainly should not be taxed. I strongly support legislation to eliminate this unnecessary burden on our nation’s Olympians … and it is my hope that Congress can swiftly pass this bill and send it to the president’s desk.”

While supporting the tax exemption, Sen. Susan Collins took the opportunity to push for broader tax reform.

“While Sen. Collins is proud of our U.S. Olympic athletes and would support this effort, she strongly feels Congress needs to undertake comprehensive tax reform to make our system fairer, simpler, and more pro-growth for all Americans,” her spokesman, Kevin Kelley, wrote in an email to the Bangor Daily News.

The Olympics, it seems, represents one of the few places where Ron Paul and Chellie Pingree — not to mention Barack Obama and Mitt Romney — take the same side.

Jay Carney, President Obama’s press secretary, said Monday that Obama would sign the Olympic medal tax exemption if it reached his desk.

Romney, who played a lead role in organizing the 2002 Winter Games in Salt Lake City, last week advocated for the exemption.

However, the Olympic flame couldn’t completely outshine political competition. Jon Courtney, Pingree’s Republican opponent in the November general election, observed what he characterized as a change in Pingree’s position on taxes.

“I would like to commend Rep. Pingree in co-sponsoring exempting athletes from tax on their winnings in the Olympics,” Courtney wrote in an email. “Like many I was surprised that she would advocate for tax breaks for wealthy athletes like Michael Phelps. This policy is in stark contrast to the rhetoric of increasing taxes on the wealthy. I am encouraged by the apparent progress and I look forward to creating a culture of government that embraces growth and job creators so we can create more opportunity for all.”

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