Friday, August 17, 2012

Usain Bolt Vows Not to Compete in Britain Until Tax Laws Change

Jamaican Track Star and Olympic Champion 2012
Usian Bolt
The most decorated track star Usain Bolt have sounded his objection against harsh taxes by Britain.  Usain Bolt's  management , stated that the triple gold medalist (London 2012) would not take part in track events within Britain until her Majesty changes those punitive Tax laws. Usain  was asked by the media in London, why he doesn't compete in the U.K. more often.  he stated"As soon as the law changes I'll be here all the time." 

Usian Bolt is Jamaican's first 100 meter men's gold medalist, Current World Recorded holder, Current Olympic champion and Olympic Record holder, 200 meter Olympic Gold medal champion and 4x100  relay Olympic Gold medalist as well, and as such racks in a hefty sum annually. 

The British government has granted an exemption to income linked to Olympic and Paralympic competition. But normally Britain takes a cut of an athlete's worldwide endorsement earnings—that means overseas sponsors in addition to those in the U.K.—proportional to the time spent in Britain. By comparison, the U.S. only taxes nonresident athletes on endorsement fees paid by American sponsors. France does the same.

So if in a given year Mr. Bolt ran in ten races, one of which was in Britain, Her Majesty's government could collect income tax on one-tenth of his total income from sponsorships. Mr. Bolt's contract with Puma alone is worth $9 million annually. After his winnings at the London Olympics Mr. Bolt is set to double his endorsement earnings.  Currently the 25-year-old is already the highest-paid Olympian - outside of basketball and tennis - which featured at this year Games with estimated earnings of 20.3 million over the past year, according to US business magazine Forbes in a report last month.

Mr. Bolt isn't the only star athlete with a knotty relationship with U.K. tax law. In 2006, tennis champion Andre Agassi lost a legal battle to avoid paying U.K. income tax on endorsement deals with overseas sponsors. Rafael Nadal excused himself from this year's Aegon Championships, the traditional warm-up to Wimbledon, on fiscal grounds: "I am playing in the U.K. and losing money. I did a lot more for the last four years, but it is more and more difficult to play in the U.K." Mr. Nadal competed in the Gerry Weber Open in Germany instead. 

Superstars like  Bolt, Messrs, and Nadal can tailor their professional schedules to maximize earnings without risking damage to their fame or competitive standing. So the best athletes stay out of U.K. competitions, the events have less popular appeal, fewer people attend, and the country forfeits both the economic activity and the tax revenue. The lesson is that taxes influence behavior, and punitive taxation hurts everyone.

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