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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."
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."
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.
I do wish people would stop using the taxation argument about legalizing it. If the only reason to legalize an activity is to tax it then it really shouldn't be legal anyways. Take for example murder, lets legalize it and tax it right? No. There are good reasons it is illegal. In the case of gambling there is no good reason for it to be illegal unless you're a pompous religious prick out to save everyones soul, that's the reason enough it should be legal and arguing about the taxation is just opening yourself to abuse by the gov't. Look at alcohol, the gov't taxes the hell out of it because it was illegal and they did us the favor of legalizing it for the taxes. They took something from us that they had no grounds to and then charged us to get it back. It will be the same with this or marijuana. We will all be so glad that the gov't has given us back a privilege they stole from us that we will accept their higher taxation.
every anarchist is a baffled dictator. Benito_Mussolini
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!
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.
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.