[bluefall]

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Three problems..

1..IRS will never do away with income taxes on gambling winning..If if they taxes every pot...Income taxes will still be paid by the winners..Plus your scheme ignores FICA taxes to "Pros"..

2..Sites will not be willing to cut there rake in half..This also infer the 2.5% would be on behalf of the players the sites would still be responsible for normal corporate profit taxes..Nor will foreign sites be willing to go along with it..

3..A uncapped 2.5% would bankrupt the games...That's 2.5% of EVERY pot leaving the game..At an avg of 60 hands per hours what's left in front of the players..This does not even take into consideration the "normal" house rake...

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It's not a perfect plan I understand. I'm not sure what you said exactly in the first point but we all know the player that wins the pot pays rake. So, the player that wins a pot pays income tax by paying the tax rake....not separately reporting it as income to the IRS in April.

Sites would HAVE to go along with it or they'd be denied access to US players. If they didn't agree to it, guess what, Harrah's or whomever would certainly pop in and get a site up and running to take advantage of the opening. By reducing the amount the site earns per hand won by a US player, the site is essentially taxed. Therefore, no additional corporate tax would be instituted. A lot of industries are taxed differently so it's not crazy to think that the online poker industry can't have a separate tax code.

Plus the policy makers should be willing to agree to any plan that maximizes their tax. Without the rake, poker is a zero sum game. The only way to guarantee taxes are taken is to break it down to the pot level or just tax the site, since they're the only one guaranteed to make money.

Point 3 has merit. But, a full 5% is already charged in all micro games. They still run, though somewhat due to the constant influx of new players or bad players willing to reload. The tax would not need to be a full 2.5% though. Maybe 1% tax, 1% to site....or whatever ratios work. Capping the site's rake. I dunno.

Somebody else commented on the international community and their unwillingness to go along with this plan. Why would they care? Only American players pay the tax. What do I care if Canadians don't pay any tax on gambling winnings?

I've had the opportunity to think about this for a long time I've probably convinced myself it's a good option. It seems like a good idea to present things to Congress in more than just the standard way. Oh well.