Be Careful What You Wish For

[faustusmedea]

The argument about taxation related to regulation is a red herring. Sure, the whole idea of regulation demands a financial cut for the regulating entity. But with regulation comes oversight and with a solid player input, you could be certain there would be a call for a maximum rake. Moreover, if online poker were to be specifically legalized, it would immediately open the doors to a very lucrative alternative revenue stream. You have windows open on computers for extended lengths of time; how much do you think adverstisers would be willing to pay to reach this demographic? Finally, regulation would breed competition such that rakeback and other incentives would easily compensate for any regulatory taxation.

[Poofler]

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Notice the [img]/images/graemlins/shocked.gif[/img] and [img]/images/graemlins/cool.gif[/img] in my post [img]/images/graemlins/wink.gif[/img]

If you want to get technical, the problem I have with taxing poker winnings is that the rules are non-equitable concerning what is taxable and deductable. And the fact that the government does not provide any protection or legal support of the activity that generated the revenue, as it would if I were a house painter.

As another poster said, "We're going to do everything we can to stop you from making money. Now that you've made some, we'd like our share." On this issue, I regret that I only have two middle fingers to give. [img]/images/graemlins/laugh.gif[/img]

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You can have my two middle fingers as well. I agree with a number of justifications for stiffing the US Government, I was just saying that already taxed income being transferred to someone else isn't one of them. The one you just provided, I certainly agree with. I also take issue with the fact that I can't claim a tax deduction on losses. If I can't do that, I'm not paying up when I win. People who 'gamble' in the stock market do get that loss benefit.

[VTX]

You know, I didn’t want to make my first post here income tax related, but it simply amazes me that so many poker players can so easily understand a direct assault against our livelihood / hobby, but barely raise a wimper about the insidious assault against our earning power that takes place 24-7 in the form of income, payroll, social security, self-employment and Medicare taxes.

You know, virtually every poker player here (myself included) could have put more pressure on their representatives to try and stop the Frist freight train. What if you had another chance to cut governments ability to invade all aspects of your financial life? Would it be worth the effort? Would it be worth it to end all withholding taxes and abolish the IRS? Wouldn’t it be worth it to not have to report to the government how much you earn or where you earn it?

Personally, I want to keep (legally) every penny I’ve earned playing poker. I want everyone to be able to keep every penny they’ve earned in their job. Can you imagine an America where politicians have lost their power to invade our lives and push their social engineering via the tax code? Can you imagine not having to go at this alone since there are already 57 co-sponsors in the House and 3 in the Senate to the FAIRTAX bill (HR 25/S 25)?

I’m not going to post the URL to learn more, since I don’t want to cross any boundaries here, but really guys/gals, if you don’t know about the Fairtax bills, please take some time and learn. This is a time in our history when we have a very real chance to reverse the direction the likes of Senator Frist has headed.

In the meantime, I’m headed back to the (virtual) tables.

[MrBrightside]

I think it has to do with control. They can't really track that money to tax it without regulating it. For some reason (politically I think) they are unwilling to do that. I think the government is greatly concerned about allow scofflaw of tax stuff to continue, as it builds up a culture of skimping income taxes. They know that people are bringing in some serious money and that money was not showing up on tax forms as gambling income.

I personally believe it had a LOT to do with the regulation. The legislative branch derives it's power from the ability to spend money. I think they are wary of people skirting tax laws and know they can't really do much about it. I guess this is an opinion, I have no facts to back it up.

[MrBrightside]

Incidentally, it looks like Fairtax is basically a European style VAT (a tax on spending, right?) with an excemption up to the poverty line (ie.e, you have no taxes due until you reach the pov. line).

I'm all in favor of this. I'm in favor of it mainly, because it might encourage savings and less of the consumer culture. You're talking to a guy who saves almost half of what my wife and I bring in.

I suggest reading "the overspend american" if you want some interesting reading on the subject.

[DerFleisch]

The FairTax would be the greatest thing to happen in American history since the surrender of the British in 1783. Unfortunately...

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Can you imagine an America where politicians have lost their power to invade our lives and push their social engineering via the tax code?

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No, I can't...and neither can the politicians. Expecting the politicians (and this is from BOTH sides of the political fence, for those of you thinking that voting Democrat is the solution to the antics of Bob Goodlatte, Bill Frist, and the like) to vote away basically ALL of their power in one fell swoop (which is what they would be doing by passing the FairTax) is like expecting a group of poker players to unanimously approve HR4411. It Just Ain't Gonna Happen.

NOW...if you want to garner the support of the everyday Joe with this FairTax, there is one way to present it which has not been presented yet, and I'm really surprised. It is using the hot-button topic of illegal immigration.

Unlike most of you here, who are mainly college students, I am a 40 year old electrician. On the construction sites I work on, I am around a bunch of illegal immigrants every day...predominantly Mexicans, but there are nationalities from all over the world. To a man, virtually none of these illegals pay any sort of tax whatsoever to the federal government. It has nothing to do with insufficient income, the earned-income credit, or anything like that...they just don't do it, and there is no paper trail to incriminate them, since they get paid cash under the table. The FairTax would alleviate this problem.

So, find the stupid people you know in your daily travels and tell them of this new-fangled way of soaking [bad redneck accent] "them damn [lol censorments]". [/bad redneck accent] If more people would do this, and make the FairTax the hot-button topic the war in Iraq or illegal immigration is, it would have a real chance of passing...but again, I just don't see it happening.

[Holdemphile]

Regarding illegal aliens and taxes, it should be noted that illegals are no longer legally permitted to pay taxes as they were a few years ago. The IRS used to provide what were known as tax ID numbers to anyone who requested them. These numbers did not provide work authorization, and an illegal immigrant working and paying taxes with such a number could still be arrested and deported by the immigration service. About two to three years ago, due to political pressure from the anti-immigrant restrictionists it seems although I don't know the whole story, the IRS stopped providing tax ID numbers to illegals. Some people thought that these numbers conferred some status and allowed illegals to work legally, although they did not.

For this reason, illegals can no longer pay taxes even if they want to. As an immigration lawyer, I have seen a number of clients who used to pay taxes, who were forced to stop paying. The IRS rejects tax returns from persons who do not have social security numbers.

Holdemphile

[omgwtf]

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People who 'gamble' in the stock market do get that loss benefit.

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Not true. If you make $1 million in options contracts during 2006, then due to market conditions lose the money on similar contracts during January 2007, you will owe $390,000 in taxes for 2006. For 2007 you get a $1M deduction, $3,000 of which you can carry back to 2006. But you still have to pay the $390,000+ for 2006, even though you have a net profit of zero.

[omgwtf]

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The FairTax would be the worst thing to happen to the American economy since the surrender of the British in 1783. Unfortunately...

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FYP

The income tax method, as bad as it is, at least only levies a tax on the net earnings of the year. No profit, no tax. A VAT or national sales tax is imposed every time money changes hands, regardless of whether the exchange shows a profit. Small businesses are crushed when the they are taxed on the money they spend instead of the money they earn.

This sort of tax would wreak havoc on our economy. 1) because money is removed from the consumer/business economy at every exchange, drastically reducing the number of times the same dollar can be spent within a given time period and 2) because it penalizes spending, and without exception money is only made when money is spent.

[lala]

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People who 'gamble' in the stock market do get that loss benefit.

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Not true. If you make $1 million in options contracts during 2006, then due to market conditions lose the money on similar contracts during January 2007, you will owe $390,000 in taxes for 2006. For 2007 you get a $1M deduction, $3,000 of which you can carry back to 2006. But you still have to pay the $390,000+ for 2006, even though you have a net profit of zero.

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well not completely true. Someone who has trader status will be able to carry back all their losses.