We seen once again just how aggressive and money grubbing our government has become under the Obama Regime. A case in point is how Obama’s IRS is now treating the Olympic winners. Anyone who should have the satisfaction of their hard athletic work and effort be rewarded with a medal in the Sochi games will have an unexpected surprise from the IRS.
You may or may not know this, but the US Olympic Committee rewards medalists with actual cash. A gold medal is worth $25,000. Silver is $15,000 and a bronze medal carries a prize of $10,000. However, once the athletes return home, they will be expected to pay tax on their winnings. This is despite the fact that the prize money is technically considered to foreign earned income.
Under the Obama Regime, this IRS actually collects taxes on the world wide income of US citizens. In other words, it does not really matter where (or even how) the money is earned. It only matters that you have created the income. Depending on the tax bracket of the athlete, they could be paying an extra $9,900 to the US Government, courtesy of the friendly IRS tax code.
This simply illustrates a point that has been a feature of the IRS tax code for a number of years already. This fact is that the US Government has now become so money hungry that they consider themselves to have a rightful claim upon any money that a US person makes, no matter where in the world this is generated. So, if you were to travel frequently and spend several months in a foreign country setting up a new business or making deals, whatever income results will still be claimed by the IRS. Is this justifiable?
Well, very few other countries have such a repressive tax system. Other athletes will certainly not face the problem of having up to one third of their winnings confiscated by a revenue agency of their government. Does this place the US athletes on a lower footing than those from other countries? Perhaps. Should the US Government be engaged in the act of actually fining our winners? Athletes from other countries will end up being treated as heroes, or even national celebrities, not end up having part of their earnings confiscated. How sad.
This unfair tax system is also the reason why more and more business people are leaving our shores. Yes, there are many business owners who have simply gotten fed up with this system and left. Not only is it unfair to tax income that is earning overseas, but the IRS has a whole host of reporting requirements, even for those of us who are not subject to any tax. Juts the act of compliance with these crazy regulations can cost hours in time and hefty fees for lawyers, accountants, and other professionals.
What do YOU think? Should the US be penalizing their Olympic winners? Do you think this system of taxation of worldwide earnings is fair? If not, what should the IRS be doing instead?