Olympinomics: The Case for the Olympic Games
Andy note: Post from mid July, but still very relevant today now that the games are going on.
With the London Summer Olympics rapidly approaching, and the torch lit over 2 weeks ago, I thought it would be interesting to do some additional research on the Olympic Games. I’ve received some decent education on the subject of the business of the Olympics through two classes: Sports Economics and The Business of Sport in Europe.
During my Business of Sport in Europe course, my professors made an excellent point, ”You probably would not be studying here in Barcelona if the 1992 Olympics were held elsewhere.” Wait, why not?
Barcelona was not on the map of major tourist destinations (especially to American’s) before the Games. With the Olympics, miles of beaches, hotels, restaurants, clubs, parks, and stadiums were built. With the design of many facilities to give stunning backdrops of the city, viewers on TV got a show. The Olympics gave Barcelona a wow factor (check out photos of Barcelona’s Olympic Diving events for proof).
The cost of hosting the Olympic Games varies widely, from Barcelona’s 10-15 Billion dollar bill to Atlanta’s 2 billion to Beijing’s 40 billion. Recent estimates on the cost of the London games are somewhere around $40 billion.
But do the Olympics really create lasting economic impact?
Barcelona is clearly the model on how to re-develop and re-brand a city with the Olympics. But let’s look at other recent games (most of this information is directly from The Business of Sports in Europe class notes).
- Atlanta 1996: The Coca-COlympics. Not successful, Atlanta won the Games because Coca-Cola is a title sponsor. Pepsi successfully ran an ambush marketing campaign. Its 2012, and despite Atlanta being the busiest airport in the world, not many people go there for vacation.
- Sydney 2000: These games did help brand Sydney and Australia as a tourist destination. And it was done for ~$4 billion. However my professors noted that the Australian public paid for about a third of this (article at bottom estimated 30-35%). I would say it was a mild success.
- Athens 2004: Major Failure. Construction cost overruns, unused stadiums after the Olympics, the Athens Games were one of many contributions to the failure of the Greek economy. But then again, it was planned by the Greek government, could you have expected it to go well?
- Beijiing 2008: Positive (for me personally, neutral) . The Games did cast a positive light on China, especially as the Chinese secured their position as an Olympic medal powerhouse. The infrastructure in Beijiing will be used for years, and little to no debt was used. However controversies surrounded the Games. From the little girl who sang at the opening ceremonies, to the terrible training and life of Chinese Olympic hopefuls, these Olympics cemented my opinion of China having a terrible government and its position as an American rival (both in the Olympics and economics). Most people in my class felt that the Games did increase their desire to visit China.
- London 2012: What do you think? Some things to note: prices of hotels will be 50-100% more expensive this summer than last summer, restaurants and bars will be raising prices as well, many Londoners are leaving for the duration of the Olympics, and the redevelopment of East London is aimed at creating upscale living in an area that was previous poor and crime-ridden (my professors noted bodies being found during several construction projects).
I found three research papers that were particularly interesting to me. I will summarize the conclusions below.
- The Olympics have had a positive impact on the stock market of smaller economies like South Korea (1988). Losing the bid for the Games may have a negative impact on the market, like with the Greek market when Athens failed to win the 1996 games.
- The “feelgood” factor of the Games is neglible. The study found that European nations benefitted from hosting the World Cup but not the Olympics.
- The Olympics can leave a positive long term legacy, but the debt overhang might take years to pay off.
Given all of this, I would be interested in hearing your responses to any of these questions. I have a few questions specifically for you London monkeys as well.
Questions for everyone:
- Would you want the Olympics in your city?
- Has your view of London as a tourist destination been positively impacted by the upcoming games? Are you going to the Games?
- Should cities compete to host the Olympics as part of a broader redevelopment or rebranding plan?
Questions for Londoners:
- Is your view of the London Olympics positive or negative? Why?
- What do you think of East London?
- Will you be leaving town, not eating out, or otherwise changing your lifestyle as a result of the Games?
- How much do you love/hate tourists?
See you next week.
-Jake
Here are the links to the papers and Forbes article.
Forbes
PWC Economic Impact
Do the Olympics Boost Stock Prices?
The Feelgood Factor
Surprised that you didn't mention Montreal 1976 (unless you were only focusing on recent games). It took the province 30 years to pay off the cost of that stadium.
I was born in England and quite frankly I think London is one of the greatest cities to live in, if you can afford it. You can really feel the age in some parts and East London is very run down. If anything, it improves the country for residents and creates more beautiful real estate in a country already so small.
I couldn't care less about soccer, but I would like to see the economic impact of hosting the Olympics compared with the World Cup (as you mentioned).
I'm from DC, I think it would be silly to host the games there, just like it would be silly to host them in Chicago. You want to have a well developed roadway system to connect the venues, and very few cities in the US can adapt to those needs. I'm a much bigger fan of the winter Olympics because they compete in smaller cities (Turin, lillihamer, albertville, salt lake city). The 2012 Olympics will not change London's status as a tourist destination - the city's been established for over a millennium.
A few points about the Beijing games:
1) The infrastructure (mainly new airport terminal and new subway lines) was, and still is badly needed; construction is still ongoing 24 hours a day. It was going to be constructed anyway. The Olympics just moved up the timeframe a bit.
2) The Bird's Nest stadium and surrounding complex has been virtually unused since 2008. Normally when venues for the Olympics are constructed, they are built in a manner such that they can be converted for more practical use after the games. Not so in Beijing. 4 years on the Bird's Nest, Water Cube, et al, by and large are literally sitting there chipping paint.
3) How much debt, or even how much money was spent is irrelevant. The Olympics were a huge point of national pride for China, and for such things the government will spend endlessly to build the "biggest this" and the "grandest that". Debt is inconsequential, since it would be raised from the various state-owned banks and corporations anyway as directed by the Party. And even if there were major cost overruns or debt problems as a result, you would never hear about it.
http://www.findingdulcinea.com/news/sports/2009/feb/Beijing-s-Empty-Ven…
Loads of venues are falling apart in Bejing at the moment, it is really sad to see.
Londoner here: it's going to be hell.
The Olympics make me sick, and what irritates me even more as a tax payer here is that all the London 2012 organizers are driving around in BMW's that are painted in the 2012 colors. First off, why do they need to drive expensive BMW's? And secondly, why don't they drive a car that is made in Britain, we make Nissan's here, instead of a care made in Germany. So much waste it makes me sick.
The real hype this summer in Europe is the Euro 2012. Soccer is the 'it' game in Europe period. Although the London picnic will be nice, Europeans will have exercised everything entertainment mythology even before it begins. I can only presume that this event (although I will enjoy watching it on TV) is at best a zero-sum game for England. Everything is expected to be served at the highest quality in London. If everything runs smooth, that's because it's supposed in 'London'. Doubt that it'll be epic because of the hosting nation, but perhaps as a result of unparalleled performance by certain individuals.
I don't know, but Lake Placid is a beautiful town.
Real Deal- Yeah the Montreal Games are the case study of how to screw everything up. I wanted to focus on games that most people could remember watching/hearing about. The $2 billion they spent in 1976 was more in nominal dollars than Atlanta 1996.
NHLfan- Check out that study linked titled "the feelgood factor." It is an econometric analysis of major sporting events increasing happiness. The problem with searching for studies titled "economic impact," is that they are almost always carried out and paid for by the event itself. Generally showing large amounts of positive impact ignoring the negatives such as: people who would have visited but now won't, local residents who leave the area, increased costs for local residents, etc. That said, you can find some independent studies that are real interesting (google.com/scholar)
Olafenizer/Veni Vidi Vici- Yes it is a real shame that China built some of the greatest (IMO) stadiums in the world, but didn't plan for how to use them after the Games ended. That is a perpetual problem of the Olympics, maybe they will sell them like Greece did.
Oreos- Tell me more, please.
Ovechkin- There has been a good amount of Olympic favoritism/corruption in recent years. Organizers and sponsors get ticket packages, then sell them for exorbitant prices to the public. I've heard London is not as bad as Torino, with sponsors holding extreme amounts of tickets and raising the price to sell them. And the paint job on those Olympic BMW's make me wonder what kind of person would drive such a thing, they sure are ugly.
Blindthoht- The Euro 2012 might be another great example of a failed mega event. With Poland and Ukraine investing billions in infrastructure, they hope it will help modernize their economy and spur development. But I think there is a large possibilities of these stadiums going to waste after the games are over. And there is a big scare over Human Trafficking in Eastern Europe.
Nabooru- I couldn't agree more, been going there every winter for the past four years. With the LP games, not that much infrastructure had to be built. Most of the venues were already there for the Olympic Training Center. In 1980 the Winter Olympics were not also considered a mega-event. Consider this, the hockey rink had a max capacity of 7700 people, at Vancouver nearly all the matches had 17,000+ in the stands.
I was born in Atlanta so naturally I'm a little biased towards the city, but I would say that the 1996 olympics were at best okay. The bombing in centennial olympic park really marred the occasion and is largely the only thing most people remember. Fortunately, we did not have enormous capital outlays to build infrastructure for the games. Unlike the 2008 Beijing games, all of the facilities built/altered for the games are still in use around Atlanta. The olympic stadium was converted into Turner Field, home of the Braves, the swimming center is used by Georgia Tech, the Georgia Dome is used by the Falcons, etc..
About 80% of the trees planted around the city died shortly after the conclusion of the games. Bill Campbell, former mayor of Atlanta, went to prison after being convicted of numerous corruption charges, many of which were tied to the 1996 games. Atlanta experienced a tremendous amount of growth for about a decade following the games.
My personal opinion would be that the Sydney games were probably the best in terms of ROI, gaining worldwide brand recognition, and overall atmosphere.
Overal, I think that public outlays for expenditure on sporting events and sports venues are one of the biggest political boondoggles around. While I cannot speak for the World Cup or any European Sports leagues, local politicians tell more lies about this subject than just about anything else.
Since 1989, of the 30 Major League Baseball teams (only 26 of which existed then, one of them playing in a different town) only the Red Sox, Cubs, Rays, Athletics, and Angels* have not had a new stadium built for them. *The Angels have had major renovations since the Rams left for St Louis, all to their benefit and all at taxpayer expense.
All of this was done at taxpayer expense through bond issues and major taxes on hotels and rental cars. Apparently, it was all in the name of 'revitalizing' downtown areas, creating jobs, economic development, etcetera. In reality, the only major benefits seem to be skyrocketing ticket and concession prices (for some of the worst food imaginable) and some luxury suites for local companies to write off all their expenses in the name of entertaining clients. Only the franchiese themselves seem to benefit, with increased cash flows and thus better valuations for their owners. If you do not believe me, look up some historical costs on baseball team sale prices.
As far as the Olympics, I am not sure who benefits.....
Few locals get to attend any of the choice events as tickets seem to only go to wealthy sports tourists.
How many citizens of the various cities get to use any of the former venues? GA Tech gets a nice facility for their swimmers to use, but what about the taxpayers who ultimately paid for the facility.
Do any of the 'sponsors' really gain anything given the huge amount of advertising dollars that they have to shell out? Even though the TV networks get a lot of advertising money, they have to pay out their rear-ends for the right to monopolize the broadcasts.
So, other than the athletes who get to go enjoy competing in their respective sports (most of which I find absolutely boring to watch. No offense to anyone, I just do.) who actually comes out ahead? Maybe if Chicago had been awarded 2016 and Obama is reelected he could have had a grand ole time parading around his home city, acting as narcissistic as ever.
Otherwise, as far as the Olympics go, you can have them.....
Funny that you mention baseball, that is actually the topic of my upcoming Public Policy paper for one of my economics classes. Even worse, is that after local governments give the stadiums public debt, the elected officials get free tickets. In DC there has been major disputes over the distribution of tickets. This week one of the councilman almost introduced a measure writing ticket distribution into law.
As far as the sponsorship goes, try paying with a non-Visa credit card for anything Olympic related. For an IT contractor like Atos Origin, this gives them one of the largest and most complex events in the world to prove their worth. A successful games on their part will likely mean billions of dollars in future international contracts as companies seek to work with a proven provider of services.
These title sponsors also get prime tickets and entertainment packages. Kind of like buying box seats for professional games, the ability to entertain clients at the Olympics provides a whole different level of networking.
One thing i'm excited for, is the Youtube Olympic channel. NBC contracted with Youtube to provide exclusive streaming content of the games. This expands the projected audience, and serves as another medium for advertisements (although it is unclear if the same ads will be displayed online as on TV, you can rest assured there will be ads).
Salt Lake City is #1 cause my boi Mitty crushed it! He showed management expertise baby!
For developed countries i dont think it does much, however for developing nations i think it has a positive impact
Any time you gotta build a velodrome in order to get people to come out should be a red flag. Because America has college athletics, and thus the venues, the cost for hosting in the USA should be far less than other places no matter what. In Atlanta's case what actually ended up being more important than a new swimming pool structurally was the athlete's village became much nicer dorms at Georgia Tech.
Atlanta benefited a little bit because they placed themselves as a world class city in some ways, but all of this has been lost now that gas is $4 and there is scant mass transit and poor infrastructure. No business wants to relocate there, and no one wants to start one there like they might have 10 years ago. They just voted down a bill that would have supposedly put more money into better infrastructure and mass transit. Atlanta's future is uncertain. It could be the modern day equivalent to the rust belt in a few decades.
In the end - Does is there a benefit to cities that host the summer Olympics, Not in my opinion. It's strictly an ego thing. Winter Olympics might actually be worth more because as others said, those cities are smaller and are vacation towns anyway, so for them the marketing might be more invaluable.
Last part of the rant: The USA will host the summer Olympics again in the future, and my guess as to which city would host it is Chicago.
Olympinomics: London 2012 (Originally Posted: 08/27/2012)
The London 2012 Olympics were, for the most part, a success for many of the parties involved (not NBC). The city of London had good weather, an athlete without legs got to run, and the whole world enjoyed spectacular competition from more than 10,000 athletes. Let's focus on the important part of the Games, the money.
London 2012 featured some incredible performances, many of which will end up paying the athletes involved incredible sums of money (Gabby Douglas, Michael Phelps, and Usain Bolt all have large paydays incoming -- more on that next week). But instead of paying attention to the athletes, why don't we look at the sponsors of the Olympic Games and see how they performed? The worldwide sponsors of the games all paid roughly $100 million for the privilege of sponsoring the games. Does that $100 million translate investment translate into a larger market cap? Below, I will track the stock price of the sponsors from July 27 (opening ceremonies) through August 13 (the day after closing ceremonies). One might expect stock prices for sponsoring companies to rise during this period, due to increased media attention and publicity, but that is not always the case.
Only three of the 11 worldwide sponsors experienced stock price decline during the Olympics (Omega was excluded due to it being a subsidiary of The Swatch Group - Swatch gained slightly). While this is not conclusive evidence, the sponsors appear to have gained some kind of value from the London Olympics. I think the sponsors who gain the most from the Olympics are those that are able to combine sponsorship with services. Atos providing IT expertise and Visa gaining credit card exclusivity are the ones that stick out. While McDonald's did gain prime placement for food choices, I don't think the Olympic message of athletics and sports blends well with McDonald's food.
The real effects of the Olympics might not be apparent just by looking at a corporation's stock ticker. If you take a look at Adidas, an "Olympic Partner", and Nike, sponsor of the USOC, you would think that Adidas won (stock rose) and Nike lost (stock fell). During the Olympics, Nike released a fantastic advertising campaign, dubbed "Find your Greatness". Nike's ads were played during TV broadcasts of the Games (at least in the US), but were also shared intensively at social media outlets (#findgreatness is the hashtag @niketraining uses on twitter and #findgreatness has nearly 8,000 instagram photos). Can anyone who is in London, Europe, anywhere else comment on the Nike ads in their country? After the 2008 Olympics, some 40% of respondents thought Nike was an Olympic Sponsor, only 50% correctly knew Adidas was the official sponsor (Beijing Sponsorship a Waste).
Companies need to weigh the cost and benefits of becoming a sponsor. For many companies, it might be best to run a non-affiliated ad campaign during the Olympics, eliminating the hefty cost of sponsorship. Can a company accomplish its goals without being a sponsor? If so, sponsorship is unnecessary.
What about other companies that want the prestige and legacy of the Olympics associated with their brands? Well, Nike has proved that you don't need to pay to be an official Olympic sponsor to be viewed as one.
**stock quotes taken from Yahoo! Finance and Businessweek
Interesting to see the varied effects.
Wouldn't the stock prices also be affected before the olympics started, in anticipation of their sponsorship. I think the best comparison is looking at the stock price, starting when the company first announced that they would sponsor the olympic games
I agree with this. Good investors would have accounted for the advertising before the Olympics. No one would have known the revenue impact of the sponsorship during the games, hence there would have been no information to price in.
Also, just eye balling a Down Jones chart, it looks like the Dow opened on July 25 around 12,617 and closed on August 10 around 13,208. If you had invested in a Dow index fund you would have been up around 4.7% during the Olympics. In other words, you would have outperformed the majority of the major sponsors. If one were to buy the theory that sponsorship affected stock prices during the Olympics one could more rationally argue then that sponsorship had a negative impact on stock price and actually subtracted from value.
Not sure how it was a failure for NBC. I heard that they expected a net loss on the games but that the net loss would pale in comparison to the amount of advertisement its primetime programs would gain--so the loss was accounted for. However, NBC announced during the games that they would, surprisingly, break even on the Olympic games, meaning that they got tens of millions of dollars in "free" advertising.
If this, in fact, was the case then it was a big win. I heard a lot of complaints about coverage but I watched a lot of the coverage without really feeling shafted or without having any material complaints. I think there are a lot of whiners out there.
The London Olympics royally (pun intended) screwed up with their Visa experiment. Not only was Visa the sole processor, there were many events and places that refused cash! Yes, cash money wasn't allowed to be used at a sporting event! Lines were long and the people were scrambling to purchase food, booze or whatever their fancy was. Poor planning on that one! Not everyone wants to make credit card transactions all of the time, especially a person like me who prefers the anonymity that accompanies a cash transaction.
that fat boy running in the nike commercial was freaking awesome. seriously. very inspiring. i didn't know what to think at first, and then at the end it almost brought a tear to my eye. find your greatness- with the fat kid running down the road to begin his path to fitness. probably the most refreshing advert for fitness i've ever seen.
During my Business of Sport in Europe course
LOL
Olympic Impact on Stock Markets (Originally Posted: 07/12/2012)
In an uncharacteristic departure from its usually apocalyptic financial doom and gloom, there is an interesting article on ZeroHedge about the economic performance of Olympic host nations:
Heaven knows the UK needs some economic stimulant. For all the complaints about the Olympics from the population, maybe it could actually be positive for business...Could the UK experience a mini boom in infrastructure investments? Could London equities outperform the rest of the world in the next 12 months? Personally I am skeptical... we have far too many underlying problems here in the UK for a bit of sport to fix. What about the underlying concept though? Athens was held at a time of a global boom and when Greece was experience benefits from cheating its way into the EU (with the help of Goldman). Beijing was during the biggest financial collapse in the Western world for the past 80 years and China was still a growth machine.
http://www.zerohedge.com/news/economic-countdown-olympics-1-impact-stoc…
If you look at my first blog post, Olympinomics, I linked to a study that showed small economies benefit more than large ones (sorry no link, on iPad). For recent Olympics, I think you are right in saying that each city/country had special economic circumstances impacting them.
The real legacy of London, will be an increase or decrease in tourism. If people find they love the city, London will be revitalized as a tourist destination. If people hate the city, then London's billions in investment were wasted. I think that this love/hate is something the organizers of the games won't be able to control, and will depend on the weather. If it rains through the games , London is SOL.
Definitely agree on the tourism part. Unfortunately I don't think the weather will be good and from what I've seen, the public transport networks will not be able to cope if there are too many people; the Central line in particular is simply unacceptable for the 21st century.
On tourism once more, there is an observed phenomenon whereby olympic hosts see substantially depressed tourism figures during their olympic year (save for the games themselves). I'd be interested in seeing an analysis with this adjustment. I imagine it is more significant in smaller, more tourist-dependent host nations. Greece definitely comes to mind.
A lot of the given reason for the depressed tourism due to the Olympics are people who would have traveled, but due to the Olympics will not. Excessive crowds and increased prices lead many to travel to other destinations instead. This also goes for intra-country tourism, not just international, I'm sure there are a lot of Brits who would travel to London sometime during August, but due to the Olympics will not.
And how can you blame them? Prices for hotels are already up 50% compared to last year.
Rent has gone up Alot. People have actually moved out their homes for 3 months so they can charge $15,000+ rent. The fat cats from the Olympic Committee need some where to stay. In terms effect on London.Maybe more business investors, but doubt it London is already pretty famous not lacking PR
infra investment - the only banks in the market who can still punch above 15yrs tenor are the Japs and Germans (and Unicred if you find them on a good day). the Japs like very basic, what is known as availability, projects. Germans have a bit more bite for innovative stuff. Furthermore, on small infra borrowers have stopped going to the banks as they frequently pull out halfway through a project... Cameron’s pension fund idea is great on paper but the funds don't have the skill set. they used to rely on the monolines but since they've fallen away they're not willing to hire project finance guys as it's a risk, and costs are tight at the moment (totes obvi braaah).
the stock market - this may have a boom, but from all accounts the lev loan market is basically shutting down, there's no deal flow anyway, and now most people are getting the hell out of the city, big trades wont get done.
This is an interesting topic.
To answer OP's questions for everyone:
1) I wouldn't want the olympics in my city right now because I'm in DC. I definitely agree with previous posts in saying that DC does not have the infrastructure to support a major sporting event like the olympics. For proof just try driving to work every day. That being said, if I were in a different city with a more open layout and better transportation system, that could be a different story.
2) My opinion of London has definitely changed positively. I went to London for a few days as a kid, but ever since then I haven't really felt like I need to go back as a tourist. But from watching the footage of the olympics now, it's making me want to visit London. Since it was able to change my view of the city for the better, chances are it has changed other people's too.
3) As much as it hurts me to say this (even though I'm a big soccer fan), the competition between cities could benefit if it is more like for the world cup. If you look at the most recent/future locations (south africa 2010, brazil 2014, russia 2018, qatar 2022) it's clear that FIFA is choosing up and coming countries that will benefit from the attention and infrastructure.
Clearly there isn't a straight forward answer that says hosting the olympics is good or bad for a city, but I think given the right conditions it can really help put a city on the map.
OP: when did you study in Barcelona? I just studied there this spring
Olympi-nomics: Medal Taxes Controversy and Surprising NBC Success (Originally Posted: 08/04/2012)
This has NBC feeling fantastic that they locked up the contract to show the Olympics through 2020. In addition, millions have seen promos for their new shows, shows that need help (Today), and new networks (NBC Sports). Could the Olympics be the jump-start NBC needed?
Tax Medal Link NBC Link
The only thing that's clear from the FIFA World Cup selection process is that it is probably the most corrupt governing body in existence. The process for the 2018 and 2022 tournaments was a joke - two members of the FIFA Executive Committee (the voting body) were suspended when it came to light their votes were available in exchange for cash. In addition, there was further evidence of other committee members (including the FIFA vice-president) looking for "donations" or other favours to secure their vote.
For any Americans out there who aren't into soccer much, take a few minutes to read about Sepp Blatter, the FIFA president. He is pretty much openly corrupt, extremely obnoxious, and hated by pretty much every soccer fan in Europe, yet he retains an iron grip on the game. How the guy has clung onto power over the past fifteen years or so is a lesson in power broking. Among his most recent highlights was his view that incidents of racism on the pitch in soccer should be resolved on the pitch by a handshake.
This is just media hype.
It's pretty simple. You have income. You pay taxes on that income.
This.
I think the US tax code needs to be simplified either way, so I'm against an tax-exemptions for any gains, be it from being a soldier or an olympian.
Where does it stop if you give Olympians a tax break? Do we start creating loop-holes for the NFL/NBA/MLB?
Olympic athelets deserve respect? Sorry, no.
Military doesn't pay taxes while overseas...
I think any tax on a government payment is silly. If they wanted 25% of what they gave you back, they should have just paid you 25% less. Be it athletes, military, federal employees, it is a waste of money to give people money, and then spend money trying to recover x% of what you gave them.
But yes, it does seem like an awfully political thing to do.
And if NBC can't make money broadcasting the Olympics, they are either brain dead or lying.
The Gov doesn't pay for the athletes medal winnings, it comes from the US Olympic Committee
Nobody is considering the theoretical macroeconomic or geopolitical reasons for the taxation exemption for Olympians.
Training for competition at that level requires complete dedication, and provides extremely low compensation. The average American Olympian makes about $15,000 a year (CNN). To win on the world stage, Olympians can't be devoting time to earning a living, so it is in the country's best interest to provide some support (assuming, as the government apparently does, that gold medals equate to international respect and influence). Olympians provide value to our society, but aren't directly compensated for it. The tax exemption is theoretically how we make up the difference.
Having said that, the tax exemption seems to me to be mostly symbolic, since someone making $15,000 a year isn't paying taxes anyway.
As for the military tax exemption, there are a ton of deductions and credits for military members that result in pretty low taxes for most servicemen and women. I think the system is fine as it is.
http://sports.espn.go.com/oly/summer08/swimming/columns/story?id=3542053
15k my ass
I could be wrong but I thought the controversy was over the IRS taxing a gold, silver or bronze medal as "income". Think I read that receiving a gold medal for your win would come with a $9,000 income tax based on the value of the medal.
If that's the case, then I don't think there is a push to exempt Olympic athletes from taxes but to exempt them from paying taxes on their medals.
I don't think soldiers don't pay tax while stationed overseas because they're soldiers. Any US citizen with less than 100k annual income don't have to pay tax. I'm going to say most soldiers probably make less than 100k.
Lol where the fuck did you get that number, you couldn't be more wrong. If someone is single and earns $9,500+ they have to file for taxes.
As the above poster mentioned, the Olympics athletes issue is on taxes on the medal per se. The value of the gold, the silver, and the bronze. The gold medal is worth ~ $800, silver ~$500, bronze ~$3. Is funny how bronze is worth about a BigMac. They should probably not tax the bronze medal winners.
I think is somewhat stupid to tax those athletes for their medals. Some of them won't even care as the amounts of money are not rally big (~$200 more in tax unless you are Phelps in 2008). But thats not something the athletes will appreciate. After all, winning for your country does put the USA in the map ;)
I vote for not taxing the medals. I know we are broke, but an extra $10,000 in taxes won't solve this mess. You should go for the big expenses IRS.
I disagree. No one living overseas should have to pay US taxes. Being an American is like renting an apartment for a few years, then being charged for it for the rest of your life even after you leave.
There is a reason we're the only industrialized country that does it.
Time for some real change ?
Ryan Lochte...
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