Following up on an earlier item, the good news is that we’ve found one lawmaker in Washington who thinks that exempting Olympians from paying taxes on a cash award is a bad idea. The striking news is that this lawmaker is Tom Coburn.
If tax code gymnastics was an Olympic sport this idea might get a medal. Like the carve outs for NASCAR, rum makers and electric motorcycles, tax earmarks are a tax increase for everyone who doesn’t receive the benefit. I’m not sure taxpayers want to pay higher rates to help beleaguered Olympic medalists who have to manage endorsement offers.
This belabors the point. A scant few Olympic medalists receive endorsement deals. Certainly Gabby Douglas and Michael Phelps are set for life, but the bronze medalist in judo or fencing or archery aren’t. Think Progress profiled Olympic weightlifter Sarah Robles who lives on $400 a month because she has no sponsors (She actually got one shortly after the profile ran). Robles finished in seventh in her event, so this isn’t really an issue for her.
The larger point about tax earmarks is pretty strong. I don’t see why carve-outs of this nature still exist in the tax code. Individually they don’t amount to much, but collectively they add up. Tax expenditures comprise an enormous amount of lost revenue; and often, the beneficiaries have little to do with the idea of encouraging behavior or job creation, and represent simply a favor for a friendly industry or, in this case, good public relations.
The problem is that most Republicans are not as committed to opposing tax earmarks as Coburn, and most Democrats aren’t secure enough in saying (if they even believe it) that taxes are the price we pay for a society that works. And that’s how we get all the loopholes and tax breaks, which are supposed to “go away” if we only lower tax rates. Mm-hm.