Eli,
There have been an number of articles recently on Jamaican sprinter, Usain Bolt, and his refusal to race in the UK. Why you ask?
From The Telegraph,
"And despite setting a new world record during the Olympics, the 25 year-old, who earns an estimated $20m (£12.7m) a year, says his UK-based fans won't see him compete until the tax laws are loosened.
“As soon as the law changes I'll be here all the time," Bolt said. "I love being here, I have so many Jamaican fans here and it's wonderful."
Glyn Bunting, a partner at Deloitte, told Radio 4 that HMRC would not only want a slice of Bolt's winnings in the UK but also his £12.5m sponsorship deal with Puma.
"Usain Bolt will be paid a considerable amount of money to wear a particular brand of clothing or a particular type of racing shoe and HMRC wants its share of that income," Mr Bunting said."
Apparently, the UK wants a proportionate amount of an athlete's endorsements. If you race in the UK once of of 10 times, it wants to tax 10% of your endorsement income.
Why did he compete in the Olympics you ask? The UK exempted Olympic competitors from the law.
High marginal tax rates clearly have an impact on work and investing, even for high income earners. This is settled science except for the marginal tax rate deniers.
Bill.
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