Gold Medal for Sentiment, But a Wipeout on Policy

The State of Missouri has a long history of excellence in athletic competition on both the domestic and international stages. And thanks to St. Louis in 1904, Missouri is also one of the few states in the country that can lay claim to having been a host for an actual Olympics. The state’s bona fides in terms of promoting and welcoming athletic competition and achievement are, in other words, unassailable.

On the other hand, the state’s track record on good tax policy is not nearly as strong, which is why a proposal to exempt Olympic winnings from state taxation is both unsurprising and disappointing. 

I should reiterate once again that Missouri needs to move away from growth-destroying income taxes, but special tax carveouts like the ones currently being debated for Olympic athletes make it ever more difficult to provide much-needed relief to all Missourians. Creating a tax incentive for excellence in one profession disadvantages high achieving Missourians in other fields who are not afforded similar deference by the state.

On what basis is it wrong to tax Olympians for their achievements and yet right to tax others for theirs? If it is wrong to tax Olympians’ income, what does that say about a tax system that relies heavily on income taxes?

I reject the idea that any tax incentive that reduces an individual’s tax burden is a net benefit to taxpayers or is even preferable as a matter of policy, in much the same way that I don’t see “pro-business” legislation as necessarily “pro-market.” Exempting Olympians’ winnings from taxes is certainly pro-Olympian, but it isn’t “pro-taxpayer,” nor is it good policy.

All the while, I understand the sentiment. We all want to be supportive of our high achievers, especially those achieving in a public way on the international stage. But legislators should focus on reforming taxes for everyone—athletes included, but not specially preferred.