This is why the Thune bill for an Olympic tax exemption needs to be passed:
Rio Olympics 2016 gold medalists from the United States will be subject to federal income tax of up to $9,900 by the Internal Revenue Service.
The figure is based on the maximum “victory tax” rate in the US of 39.6%, charged to the country’s highest earners, according to Americans for Tax Reform. Therefore, silver and bronze medalists in this tax bracket will be taxed $5,940 and $3,960 respectively.
Athletes in the lower brackets would be charged with 15%. Training expenses would also likely be deductible. For each medal a US athlete wins in the Olympics, the US Olympic Committee pays them $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Michael Phelps is bringing home $140,000 for his five gold medals, and one silver medal, although he will be taxed up to $55,400 for this amount.
Considering we don’t subsidize athletes like many other countries, it’s the least we can do.