For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.In the case of silver medalists, Last forgets to note the ignominy of being the number one loser. And as a friend pointed out on Facebook, the calculations carried out by Americans for Tax Reform represent worst-case scenarios, as they assume every dollar of the prize money is taxed at the highest possible rate.
There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.
Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986.
But this pales in comparison to example number two, as documented by John Steele Gordon at Commentary:
When New York art dealer Ileana Sonnabend died in 2007, she left her children a fabulous collection of modern art valued at $1 billion. Her children have already paid $471 million in estate taxes on the collection, being forced to sell off most of it to meet the bill...If the government wants the tax money so badly, it should take advantage of its sovereign immunity and purchase this work of art for every last penny of the price at which the IRS Art Advisory Board appraised it. Hang it in the Smithsonian or something. You know, since nobody else can or will buy it.*
But there is one item in the collection, a work by Robert Rauschenberg that cannot be sold. It contains a stuffed bald eagle and under the terms of the 1940 Bald and Golden Eagle Protection Act and the 1918 Migratory Bird Act, it is a felony to “possess, sell, purchase, barter, transport, import or export any bald eagle — alive or dead.” The estate, advised by three experts, including one from Christie’s, therefore, valued the work at zero. The IRS decided it was worth $65 million, and is demanding $29.2 million in taxes and $11 million in penalties because the heirs “inaccurately” stated its value.
Both these are instances of a Federal government bent on laying claim to every dollar it can place it hands on, because that means one less dollar we have to borrow from other sources, including certain willing foreign creditors. But can't we reduce the deficit by cutting spending? We can, but in the "establishment" of both the major parties, those who are serious about fiscal discipline aren't serious about getting elected. The cover story of the most recent issue of Reason, "Generational Warfare," lays out in excruciating detail the nature of the problem and how bad a deal the young will get on so-called "entitlements" if they remain as presently structured. Neither House Budget Committee Chairman Paul Ryan, nor any elected official who favors letting the budget sequestration take full effect, is willing to fully come to grips with the magnitude of the structural imbalance of Social Security and Medicare. To do so would risk the wrath of the elderly at the polls. But to not do so is to kick the can down the road — the very same road Greece finds itself near the end of as we speak.
* To be clear, the Feds buying the piece would be a distant second-best alternative to them backing off and being satisfied with the nearly half a billion dollars they've already extracted from Sonnabend's children.