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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.
what better way to fund state governments than predating upon the weaknesses of your citizens.
Ten bucks says you're wrong, sucka!
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) Instead of showing ANY fiscal restraint, the governments kept expanding to take advantage of the property tax bubble.
b) low interest rates pushed forward a lot of activity in the home building market, creating a lot of jobs which will not be replaced.
c) the executive class, whose pay has increased from 50x average to 450x average is actively shipping jobs overseas (to the tune of thousands).
d) the long term trend is wages will stagnate or drop towards those in BRIC. (brazil, russia, india, china). This means the value of houses, etc. will drop because people will have a smaller amount of money for paying for property. Smaller incomes also mean smaller taxes for the governments.
So the long term trend is lower property taxes, lower property values, fewer jobs, lower paying jobs.
The governments are going to absolutely hate it, but they are going to have to cut a lot of programs outside of welfare/unemployment benefit programs to prevent social unrest.
People's expectations of living in a 3,000 square foot house are going to have to reset back to 1600 square foot houses (or even the 1100 square foot houses prevalent in the 1950's.
And that's ignoring the scarily fast advances in robotics lately. An entire swath of basic manual jobs are on the verge of going away in a few years.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Given that many of the current online gambling sites are run anonymously by organized criminal networks outside the US, how would collection or enforcement work?
Many gambling sites that don't allow Americans are taxed and regulated in Europe. Some (such as PartyGaming) are traded on the London Stock Exchange. It's better for business if they are legitimate...they won't even hesitate to follow all the regulations.
Would gamblers be obliged to write how much they won on their annual tax returns, like we're supposed to note purchases made online?
My guess is if you win/lose more than a certain amount, the gambling site will send a form to the IRS and to you at the end of the year detailing how much money you won/lost. This is what the brick and mortar casinos do in the U.S.
For example, "the lottery" has regularly been shown to basically be a "poor tax." Isn't there a "usual crowd" who speaks out against regressive taxation? Aren't they leftists?
I would actually argue it is more of a "stupid tax" but I also feel that way about most forms of gambling.
The summary stated that they would take 6% for state and 2% for Fed on each WAGER... That is incorrect... they are taking 6%/2% of your DEPOSIT in the online gaming account. If they took 6%/2% of your WAGERS, you'd be broke in no time!
Given this level of taxation, I'd be in favor, just for the legalization aspect alone... I'm generally not in favor of "feeding the beast" with more tax revenues, but if it gets me legal online gaming, then I'm okay with it.
Brawndo: It's what plants crave!
Its more likely that in order to be legal, these would have to be US based gambling sites. You would receive tax documentation showing losses and gains on an individual basis. You might even have to prove your identity (scan your driver's license/passport) just to be allowed to gamble.
From a gambler's perspective, most money lines are already in favor of the house. An even money bet (like the point spread bet or the under/over )might get you -103 to -112, depending on the place. While the payouts are even money, the odds of winning are not, and the house makes a profit by trying to get roughly equal amounts of betting on each possible outcome (adjusting the line as necessary). Professional gamblers are able to tell when the line is favorable to a specific bet. Adding a (6% state + 2% federal) tax on wagers (even though winnings would also be taxed as income whether you remove the winnings from your account or not) means that if you bet $110 on an even money proposition and are in the 25% tax bracket, your after tax winnings are only $69. In order to break even this way, you would have to win these propositions 61.5% of the time. The best gamblers win about that much, because the line is distinguished by people who bet on who they want to win, not on who is likely to win. Gambling sites are fantastic at finding where to draw the line to get the most action, but professional gamblers are not going to play just to break even.
As the summary notes, it would end up being a source of money, just not for those participating.