The Olympic path is no cakewalk. Years and thousands of dollars are sacrificed to the goal of honing athletic prowess.
Along the way, many professional athletes also have to fund their efforts by part time work or donations. In the run up to the Rio Games, the crowdfunding site GoFundMe saw nearly US$750,000 raised across 140 campaigns for athletes and their needs. Likewise, Singapore’s first Olympic rower Saiyidah Aisyah depended on her online crowd-funding campaign to help pave her way to Rio.
Those who are lucky enough to win a medal and cash prize at the Olympics might also see a chunk of their winnings taxed.
Such was the case of Singapore’s gold medallist Joseph Schooling. His family spent S$1.35 million over his 7 years of US swim training, and enjoyed only an average of three weeks of family time with him annually. Although he did receive the highest Olympic cash prize in the world of S$1 million for his historic win, 20% must be ploughed back for future training and development, with the remaining S$800,000 open to tax.
Other celebrity athletes are no exception. Michael Phelps, the most decorated Olympian ever, may owe up to US$55,000 (S$74,250) in victory taxes, while Simone Biles, perhaps the greatest gymnast in sporting history, might see a tax bill of nearly US$43,560 (S$58,800), before any offsetting for money spent in training and travelling. And for US athletes, there is also the medal tax; a tax on the gold and silver content of their Olympic medals.
Bill-settling after hard-won victories can seem rather unfair, with prize money taxes for basically any international championship – think global golf tournaments and the tennis Grand Slam. Income from sponsorship deals with brands like Nike and Red Bull is, needless to say, also taxable.
Given the challenges athletes face, should they really be taxed?
Imagine if scientists went through something similar: funding their research on their own, earning lump sums every few years – if they achieve scientific milestones – while they run the risk of injuries (a fitting analogy might be strokes, migraines, or burnout) which could remove them from hard-won careers. Lastly, athletic ability tends to peak within a few years, so imagine scientists having to switch careers after a decade of work, with a set of specialised skills not suited for many other professions, other than coaching newcomers.
Athletes live on sponsorships (if any) and prize-winning cash. Unlike the average person, they don’t have a monthly income, yet like most of us, any “income” they do earn is still taxable, making for a precarious career path.
They also give back to society in many ways other than tax. Athletes who clinch Olympic victories raise a country’s self-image, build important cultural touchstones, and elevate the nation on the global stage, with possible benefits for the country’s economy. At the very least, we should be really grateful for the true sacrifices they make for their country.
By Vincent Tan
