Olympic Gold and Geithner's Cut of All That Glitters!

Olympic gold medals haven't been 100% pure gold since the 1912 Olympics, one year before the Federal Reserve was created. But what are the medals worth besides the obvious value of prestige, achievement and national honor?

What the 10 Biggest 'Gold' Medals Would Be Worth, If They Were Gold

The price of gold has soared from roughly $1,000 an ounce during the 2008 Summer Olympics in Beijing to $1,584 an ounce by mid-July of this year.

If an Olympian or the average Joe tried to cash in a medal from this year's games by means other than an auction or a sports memorabilia dealer, they'd be parting with 92.5% silver, 6.16% copper and 1.34% percent gold. International Olympic Committee rules dictate that gold medals need to contain at least 550 grams of silver and at least six grams of pure gold coating. That adds up to a medal worth roughly $800 for "gold" medal winners in London, which is a huge discount from a medal worth its weight in gold.

Since the actual medal weight of gold and silver has significantly declined over the years, Olympics medals have a whole lot less gold and silver value than they used to have. More interestingly, while the weight of the gold and silver in the Olympic medals is shrinking, the government's claim via taxation is also quite significant.

Go for the Gold! (Pay the IRS.)

Even by the standards of our government, the numbers are insane.

For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986.

So as of this writing, swimmer Missy Franklin—who's a high school student—is already on the hook for almost $14,000. By the time she's done in the pool, her tab could be much higher. (That is, unless she has to decline the prize money to placate the NCAA—the only organization in America whose nuttiness rivals the IRS.)

ATR notes that the real twist of the knife is that most other Olympians won't pay any taxes on their medals because America is one of only a handful of countries which taxes "worldwide" prize income earned overseas.

So much for American exceptionalism! About the only thing America is exceptional at is plunder.