6a. Re: Question about Illinois/Indiana/Iowa Taxes/
Date: Tue Jun 5, 2007 12:49 pm ((PDT))Although it's up to the state legislature to make these decisions, and I'm
really all for states' rights, our elected officials need to do more to protect
their constituents. I realize that many consider gambling a "sin" and so on, but
they did, in fact, make it legal. This threshold issue could be a run away
train--what's to keep lawmakers from having $100 jackpots trigger a tax
deduction? (Maybe they're looking for the exact dollar amount at which the goose
will stop laying golden eggs so they can subtract one cent and have a
threshold!)Guess you can tell unreasonable taxation is a hot button for me. Linda
This one's not as bad as the "real" sin taxes - the ones on cigarettes and alcohol. This is just income tax, which you're supposed to pay anyway. The only thing that's different is that they want you to pay on GROSS gambling income instead of net gambling income, and I don't enough about taxes outside of gambling to know if there are other areas of GROSS income against which deductions can't be taken in the same manner as with federal taxes.
Making gambling legal doesn't make it free from tax -- just as cigarettes and alcohol are legal (you just can't smoke anywhere or get drunk in public, or drive drunk...) -- but are subject to taxes.
Perhaps the worse one is property tax -- where, even if you "own" your property, if you can't pay the tax, they can take it away from you. I used to hear a phrase "I own it free and clear", but I don't think that really exists anymore.
If it was really a "sin tax", they'd tax you even more than the income tax rate, I would think -- but I hope none of them are reading this, I don't want to give them any ideas.
You're right, of course, that there's nothing to stop them from taxing more and more -- and they will, if they want the money and think they can get away with it.
They could consider your "purchase" of chips to be subject to sales tax, for games that use chips (and would undoubtedly find a way to tax coin-in for machines, since they don't take tokens any more in most places).
They could tax you for going into a casino -- oh, wait, Illinois already does that, but they charge the casino instead of the patron, as I recall, but there was a time (still going on?) when the casino was therefore charging admission!!
They can tax casinos differently than other businesses -- and sure enough, they do -- and that affects the ability of the casino to serve its customers by providing better games and more comps for playing them, an indirect tax on the patron.
They can pass a law to do whatever creative thing they want to do to raise revenue, with very few limits -- so just paying the state income tax at the time of a hand payout, when you're SUPPOSED to eventually pay that tax anyway, is not as bad as some things they could do.
It will be interesting to see, if the feds make online gambling legal again but decide to regulate it and tax it, whether the states find a way to get a piece of that pie once it's on the table.
In the end, they're going to tax somebody for something, and in the words of one of Washington's leading politicians (whose name escapes me at the moment), constituents always say "Don't tax you and don't tax me, tax the man behind the tree" -- and that's what the politicians do -- they tax the "target" that is least like to yell, or likely to yell the least loud, or least likely to keep the legislator from getting re-elected because they were taxed.
As you can probably tell, I also am not a fan of taxes, but I realize that all I can hope for is that they don't seem to write every tax bill with my life specifically in mind -- although it sure does seem that way sometimes!
--BG
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