Published on: 08 Aug 2012
Did you know that if you win a medal at the Olympics then you will be taxed on it?
The above statement isn’t true for residents of every country but if you’re an American then unfortunately for you it’s true.
So you’ve spent years training to perfect your sport. The big Olympic day arrives and you are successful and win a medal. Surely, this is the pinnacle of any sportsman’s career?
If an American athlete is successful at the Olympics then it is also good news for the American tax authorities as under US tax laws anybody that wins an Olympic medal has to add the value of that medal to their taxable income.
This in itself raises an interesting question as to what is the “value” of an Olympic medal as I’m sure most successful Olympians consider their medal to be priceless.
According to information released by the organisation Americans for Tax Reform though “at today’s commodity prices, the value of a gold medal is about $675. A silver medal is worth about $385 while a bronze medal is worth under $5” (although personally I doubt Usain Bolt would sell his 100m gold medal for $675…).
The US Olympic committee also award cash prizes to successful medallists ($25,000 for gold, $15,000 silver and $10,000 for bronze).
Adding the value of the medal to the cash prize and then applying the 35% top rate of income tax in the US gives a tax bill per Olympic medal of:
Gold medal – $8,986
Silver medal – $5,385
Bronze medal – $3,502
As at the time of writing the US team had 34 gold, 22 silver and 25 bronze medals. This would give the US tax authorities over $500,000 of tax revenue.
So if you’re a successful American Olympic medallist then first of all many congratulations on your sporting success and secondly, don’t forget to settle your tax bill…
Published on: 06 Aug 2012
So the Olympics are well and truly underway and whilst a lot of the athletes have been inspirational in terms of their performance there have also been some inspirational performances by businesses.
There are a number of official Olympic sponsors (for example, McDonald’s, Coca-Cola, BMW and Visa). These companies have paid the Olympic authorities big amounts of money to be official sponsors.
LOCOG (the London Organising Committee of the Olympic and Paralympic Games) have been particularly vigilant in terms of monitoring for any unauthorised use of the Olympic name or Olympic logo by companies which are not official Olympic sponsors. For example, they have swiftly taken action against any company that has illegally used the Olympic name in advertising.
Irish bookmaker Paddy Power has got a reputation for, how can I put it but controversial or cheeky advertising.
A few days before the start of the Olympics, Paddy Power sponsored an egg and spoon race (a children’s race where children run whilst trying to balance an egg on a spoon).
This egg and spoon race took place in a small French town. The nice thing though was that this small French town was called London and as a result Paddy Power designed their latest poster advertising campaign with the following text:
“Official sponsor of the largest athletics event in London this year! Ahem, London France that is).”
LOCOG instructed their lawyers to get the posters removed but Paddy Power’s lawyers successfully pointed out that they had not broken any law and the posters remained in place.
A great example of gorilla marketing and a gold medal performance by Paddy Power.