For someone who’s not interested in a high profile job like Vice President, Florida Senator Marco Rubio sure knows where the limelight shines. Earlier this week he introduced legislation that would create a new federal income tax break for the cash bonuses received by U.S. Olympic medalists. (It turns out that the United States Olympic Committee gives gold medal winners $25,000 cash bonuses, with smaller awards for silver or bronze.) With no apparent irony, Rubio issued a press release noting that the “tax code is a complicated and burdensome mess,” and then proposed a new tax break that would make it even more so.
How, at a time when Congress faces vital decisions over the basic structure of our tax system, did the Senator identify the tax treatment of Olympic bonuses as a pressing issue? It turns out that Americans for Tax Reform (ATR) put out a press release saying that medal winners will face a tax bill of almost $9,000 if they win a gold medal. Rubio’s spokesperson said that’s what caught Rubio’s eye.
But the ATR numbers are complete bunk. Their calculations assume that a medal winner will pay tax at the 35 percent top rate, but less than one percent of Americans pay anything, even a dollar of income, at the 35 percent rate. (Politifact agrees, and rates ATR’s claim “mostly false.”) We can only think of a dozen or so gold medal winners who might, in fact, pay 35 percent on their gold medals: they are members of the US basketball team, and they are all millionaires.
What Senator Rubio and his counterparts in the House are proposing is to add yet another exemption to our tax code, which is, of course, the main reason it’s so complicated – Congress insists on flagging more and more special types of income for special tax breaks.
If Rubio’s bill is really an honest attempt at tax reform rather than an attempt to capitalize on Olympics-related publicity, it’s actually doubly sad: not only did he get duped by misleading numbers from Grover Norquist, he also just doesn’t seem to understand that the “complicated and burdensome tax code” he bemoans will become even more so if his bill passes!
If, on the other hand, Rubio’s bill is the cynical grandstanding that it appears to be, it’s a real shame. As we've said elsewhere, our revenues are dwindling, the rich pay less and less in taxes every year and the tax code is a Rube Goldberg-ian mess. But it seems Senator Rubio is more interested in compounding these problems than solving them.
Photo from Politifact.com