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Why Congress is Proposing a 100% Tax on Some U.S. Athletes

What happens when an American athlete stands on the podium to accept a medal for another country?

It is a scenario that recently caught lawmakers' attention. A federal proposal introduced in Congress aims to impose a 100% excise tax on specific income earned by U.S. citizens and permanent residents competing internationally for certain foreign nations.

If passed, some athletes could be forced to surrender every dollar they earn.

Breaking Down the Proposed “OLYMPICS Act”

The legislation, named the Officially Limiting Yearly Money Procured by Individuals Concerning Sportmanship (OLYMPICS) Act, seeks to create a financial hurdle for athletes representing specific countries. It would levy a 100% excise tax on:

  • Income earned from competing in international events
  • Prize money awarded for athletic performance
  • Sponsorships tied directly to representing the foreign nation

Currently, the proposal targets athletes representing nations like China, Russia, Iran, and North Korea. However, the framework could theoretically be expanded, applying to high-stakes global events like the World Cup and the Olympic Games.

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The High-Profile Catalyst

This legislative push did not materialize out of thin air. It is heavily tied to recent international competitions and athletes like Eileen Gu, a U.S.-born snowboarder competing for China. Gu represents a prominent example of an American competing abroad, largely due to the financial windfall involved.

A Common Practice in Global Sports

Switching national representation is standard practice across global sports. Athletes make these career decisions based on dual citizenship, deeper family heritage, better coaching, or simply a clearer path to qualify.

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Many familiar faces compete under flags different from their primary residence. Golfer Rory McIlroy represents Ireland in the Olympics despite playing on the U.S. PGA Tour. In the NBA, stars like Joel Embiid have weighed representing multiple nations, while Luka Dončić actively plays for Slovenia. Track athletes also shift representation, with runners like Bernard Lagat competing for both Kenya and the United States over his career.

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The Global Tax Reality for Cross-Border Earners

At Blumark Tax Advisors, we regularly remind our high-income clients that the U.S. tax code is uniquely far-reaching. The United States taxes its citizens on their worldwide income, regardless of where they live or earn it.

This means an international athlete already faces serious tax complexity:

  • They may owe U.S. taxes on their foreign earnings.
  • The host country where they compete may demand a cut.
  • This creates severe double taxation risks, mitigated only by specific tax treaties.

As one analysis points out, dual-national athletes face concurrent tax obligations in multiple countries. Cross-border income is rarely simple, even without new excise taxes.

Tax Policy as a Behavioral Tool

This legislation illustrates a broader trend: governments leveraging tax policy to steer behavior. We see this with extra taxes on alcohol to curb consumption, or tax credits aimed at incentivizing renewable energy. The OLYMPICS Act poses ongoing questions about where the line is drawn between a standard tax and a penalty on professional mobility.

What This Means for You

Even if the OLYMPICS Act never passes—and enforcing it across complex foreign financial structures would be difficult—it highlights an inescapable reality. In our modern global economy, taxes follow you and your decisions.

Whether navigating cross-border investments or managing complex compensation packages, proactive strategy is essential. If your financial footprint extends beyond U.S. borders, schedule a consultation with the team at Blumark Tax Advisors in Auburn Hills, Michigan to gain clarity and protect your wealth.

Want Tax Help?
Blumark Tax Advisors offers tax planning, tax preparation, and financial advisory services tailored just for you.
Contact Us
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