Re: Regulating online poker and sites by \"taxing\" the rake?
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How much are poker players contributing as tax now? $500 million? What about the $$ the IRS loses when people claim the maximum deduction? I have no idea what either value could possibly be. But let's assume the IRS nets more with this method than they do by the current standard. Why would Congress not agree to a system that nets more tax, regardless of how fair it "seems" to be to the regular worker?
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Well, the system that would net the most taxes would be to tax the sites and have gambling winnings be reportable as income (or tax each pot and have gambling winnings reportable as income). Why wouldn't Congress just do this?
Congress is never going to exempt gambling winnings from the income tax. Never. Such a proposal will lose 90% of the politicians who already support online gambling. You also add additional complication to the tax code, which no one wants (since you are now distinguishing online gambling from land-based gambling).
To find a realistic potential system of taxation for poker sites, you might want to consider looking into how gambling operators are currently taxed at the state level.
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