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House Proposes Legalizing, Taxing Online Gambling
eldavojohn writes "Passed in 2006, the Unlawful Internet Gambling Enforcement Act is set to go into effect June 1. New efforts by Democrats in the House of Representatives aim not only to stop that but to legalize and tax Internet gambling. Jim McDermott (D-WA), said, 'This is a huge boon to the state governments. If you look across the country you're seeing programs cut. In Arizona, they just cut out a program for children's health for 40,000 kids. Here's a source of money.' Basically, the bill proposes that for each state, a 6% cut would be taken from all wagers and go to the state in which the bet was made online, while federal would get 2%. They estimate in the next decade this would amount to $30 billion for state and tribal governments and $42 billion for the federal government in new taxes. Banks and casinos appear to be very much on board, while the usual crowd (Republicans, Focus on the Family, Think of the Children) gathered in opposition to the move."
I have a tendency to agree. Despite the social problems gambling brings. Just like alcohol, it seems better to tax it instead of watching the profits go somewhere else.
Everything I write is lies, read between the lines.
why "Republicans" are against this?? Aren't they supposed to be in favor of small goverment and fewer regulations? This is exactly why the tea parties are becoming so big, we should be able to do what we want with our own money in a free society, as long as it doesn't harm anyone else. To paraphrase Thomas Jefferson Who cares? "It neither picks my pocket nor breaks my leg."
A) nothing I can address here.
B) This is really common knowledge. Yahoo had a big piece on 10 areas who are hit really hard by the double whammy. Large liabilities committed to on the assumption that the good times would not end, high unemployment, no demand for new housing (so no new housing jobs). Many houses under water, being foreclosed).
C) First-- are you really that out of the loop? This has been commonly known for over a decade. But okay.. I'll google it for you. .3% on the wealthiest (same dollar amount). Social security caps at just over $100k (15% on you and me-- under 1% on the wealthy). Likewise the "property tax" benefit only benefits you to the amount that it exceeds the standard deduction. A person with a $4k property tax bill saves almost nothing (a few hundred) while a person with a $20k bill saves almost $6,000.
http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20060621/
The wealthy pay a lower tax *rate* than everyone else at this point too. The secret is "fixed" state taxes like auto fees, property tax, etc. run 12% on poorest but only comprise
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
"As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)."
I can't find it now, but a later source (2008, 2009) said the top 1% now owned 42.7% (and the next had 42.3%) putting the top 20% at an incredble 95% of the wealth.
Our GINI index is close to most 3rd world countries now.
D) Again, this is fairly common knowledge. Surprised you are ignorant of it.
http://uchicagolaw.typepad.com/beckerposner/2010/04/american-wage-stagnationposner.html
"Between 1997 and 2008, median U.S. household income fell by 4 percent after adjustment for inflation. It presumably did not rise in 2009, and may not in 2010 either. A median is not an average; average income rose because the incomes of high earners rose, and so the effect was to increase the inequality of the income distribution..."
E) If you can buy a device that can do any manual labor that a human can do for $100,000, then why hire a human. We are very close. You don't have to pay social security taxes for the work it does. It doesn't call in sick (it may break once in a while but will probably be modular and easy to fix). It's close. A decade. They can already pick random objects out of bins, toss things in the air and catch them, assemble things faster than humans.
We are running out of jobs to step up to. Most of the jobs we can step up to based on intellect or training. Many of those jobs have a couple billion new humans who are smart enough to do those jobs and happy to do them for under $30,000 a year. It could be a paradise-- no need for most to work, essentially free food and lodging- or it could be pretty hellish.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
What you're advocating is called "trickle down economics". Even it's most famous adherents like Greenspan have declared it a failure. You seem to think that the US economy is a meritocracy and that it is intelligence or motivation that determines how wealthy you are. That belief does not stand up to statistical analysis and completely ignores a fundamental trait of economic called the wealth condensation principal (or it takes money to make money if you want it in more colloquial terms). The best predictor or wealth is the wealth of a person's parents. The largest transfer of wealth in the US is inheritance. If a person is in the top few percent for wealth ti is almost a statistical certainty their parents were in the same category. The only thing that changed under the trickle down economics era has been for the middle class to gradually become the lower class.
So go ahead ... make it so people like Bill Gates and Steve Jobs or their original employees who became rich developing their products have no motivation to get rich. See what it does to the standard of living in the US.
Bill Gates was the son of a lawyer and banker from a family of bankers. He's not a very good rags to riches story. He bought QDOS from the creators who worked hard to make it and used exploitive business practices to make himself rich while crippling progress in several fields of computing. But nevermind that. Basing the way your economy works upon statistical outliers is just idiotic. Let's make all the speed limits 200mph, because there are a few people with absurdly good reflexes that can drive that fast safely. Idiocy!
The idea that people will stop working hard and growing the economy if the government takes a larger share in taxes is not founded in any fact. It was an idea that did not pan out. In fact, countries with better social safety nets recovered from the global economic meltdown a lot faster than the US and aren't dealing with the huge booms in crime and homelessness we are. People take more risks and try more innovative things when failure means going on the dole and eating cheap food while living in a tiny apartment, instead of living on the streets until you get sick and having no realistic chance of ever working your way back up. You say if we return taxes to levels they were in the 70's people will no longer work hard and innovate? You're basing this on how terrible the economy was in the 70's compared to now?
Seriously, pick up a real economics textbook and learn how things work. Your ideas are unfounded and simply wrong.
Taxation in some of the cases you mention is win-win: alcohol, pot, etc. Vice taxes work because they add a financial disincentive to an objectively harmful activity (unless you're talking a glass of wine a day, a la Europe) to increase the short-term cost, effectively substituting for obviating the long-term cost.
In other words, we tax cigarettes now to deter you from smoking, but in the event that we can't do that, we use the increased revenues to pay for the increase in health costs that you rack up when you get lung cancer later. And yes, we pay for your lung cancer because you're likely on Medicare.
As to drugs, the idea of "legalize and tax" misses much of the point. That should be "legalize, regulate, and tax," where regulation is the process of telling you, the consumer, what you're getting, which in the case of drugs can minimize things like overdoses.
However, all that's arguably separate from issues like gambling which, while an addictive behavior, is not objectively harmful beyond the addiction. Most other vice taxes are regressive, but they serve a long-term benefit in disincentivizing the often-physically-unhealthy vice, whereas taxing gambling provides the disincentive to an activity that causes little objective harm. This makes gambling unique (at least so far as I can see) among the vices that we'd regulate in this manner.