Tax Breaks For Olympic Medalists? No Thanks!

Last week Democrats in Sacramento killed a bill by conservative Assemblyman Brian Jones (R-Santee) that would have exempted Olympic medal winners from paying state taxes on their winnings.

The U.S. Olympic Committee gives out bonuses to medal winners — $25,000 for gold medals, $15,000 for silver and $10,000 for bronze. Your first reaction might be frustration that something to help out our athletic champions was stopped. But let me explain why it is actually good that Jones’ bill did not advance.

While I am glad Jones introduced this bill, as it draws attention to California’s absurd tax rates, we are well past the point where we simply can’t afford any more preferential treatment in our tax codes, federal and state. Period.

The more narrow the group of people benefitting from treatment that is different than everyone else, the worse public policy it is — and the more immoral it is. I say “immoral” deliberately, because it is not right for government to apply rules and policies differently for different groups and categories of people, especially small groups and narrow categories. It is an insult, an affront to the notion of everyone being created equal under the eyes of God and people being treated equally by their government.

In this case, while the achievements of Olympians are amazing, they are still Americans, and some are Californians. Their heavy tax burden should be alleviated by lowering everyone’s tax burden, not by giving medalists a “carve out” — using government policies to create winners and losers. It’s worth noting they are already winners, American heroes, without special tax treatment.

So called “targeted tax cuts” or narrow tax credits might sound great. Hey, if anyone can be freed from some level of taxation isn’t that a win? And in California, with a liberal legislature guaranteeing that no broad tax relief is on the horizon, should we not push for any tax relief, no matter how narrow?

No. Actually, hell no!

Whether it is saying that an individual consumer product (such as tampons), a type of business (such as just for film-making), a type of activity (like just for manufacturing) or for just a particular area in California (enterprise zones), or just for moving to California (Can you say Tesla?) — all of this special treatment in tax policies has a terrible effect on our system of governance.

This pattern of gaming the system for the benefit of only a few has created a culture of corruption that has become so prevalent in our federal and state capitols. Those who benefit or want to benefit from special, narrow, favorable treatment hire well-connected lobbyists (often these are former politicians, advancing the idea that bellying up to the give-away bar means a lucrative payday for modestly paid legislators when they retire). It means big campaign contributions, or big independent expenditures to help those who go along, and to punish those who do not. It means big donations to causes near and dear to the political elite. I could go on.

Of course the inherent big losers in this process are we, the average people. Not only do we typically see little to no benefit from this narrowly targeted tax-code and spending favoritism, but it stands to reason that we are the ones actually footing the bills for the costs associated with all of this mess. Nothing happens for free. When government picks a winner, it creates a loser. Call it a rule of political physics.

I should add that as this system becomes more entrenched, and the number of those who benefit from special treatment grows, a great loss and injury occurs to those of us who would like to see broad reforms — such as across-the-board tax cuts or a move to a flat tax. Every interest that has carved out their “30 pieces of silver” through twisting the current system to its financial benefit now has a vested interest in maintaining the status quo. After all, it is very likely a that a company’s tax burden goes up even with lower tax rates if its industry-specific tax credits go away, or whatever the carve out happens to be. Many narrow interests pay little or no taxes at all.

This growing system of corruption rivals ideological liberalism as an impediment to meaningful tax reform. It may be worse as it causes many who believe in tax cuts to hesitate or even create impediments lest the goodies, favors and money stop befitting them!

And so we come back to Michael Phelps (of Baltimore, Maryland, another high-tax jurisdiction). No one has earned more Olympic Gold than he. He is looking at hundreds of thousands of dollars in bonuses from just the Rio Games alone. But are his victories more worthy of government favor than than the hard work of a police officer, or a soldier? How about an emergency room doctor? Or perhaps an elementary school teacher? Of course not.

It is broad tax relief that would make us all gold medal winners.

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Jon Fleischman is the Politics Editor of Breitbart California. A longtime participant, observer and chronicler of California politics, Jon is also the publisher at www.flashreport.org. His column appears several times a month on this page. You can reach Jon at jon@flashreport.org.