After anti-tax group Americans for Tax Reform released a report detailing the taxes that Olympic athletes have to pay on their winnings, Florida Sen. Marco Rubio (R) sprung to action, introducing legislation that would exempt Olympics-related earnings from taxation. The law was quickly endorsed by other lawmakers, and President Obama said this week that he wouldn’t veto it should it pass.
One Republican senator, however, is breaking with Rubio. A spokesperson for Oklahoma Sen. Tom Coburn (R), who has a long-running feud with Americans for Tax Reform president Grover Norquist, told Bloomberg columnist Josh Barro today that Coburn wouldn’t support the legislation:
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.
Tax accountants have debunked certain parts of ATR’s analysis — despite the group’s claims, Olympic medals are not subject to taxation — and others have pointed out a massive loophole in Rubio’s law that would allow athletes to avoid paying taxes on endorsement money. That loophole would give an athlete like swimmer Michael Phelps a tax break worth some $300,000 or more.
Coburn also signaled opposition to another collection of inane tax breaks passed through the Senate Finance Committee last week. That bill, as Coburn notes, would provide a tax break to NASCAR team owners, rum producers, and companies that offshore their profits.