So what has changed beyond the domain suffix? For starters, all cash games now have a per hand rake of 7.39% up to 3.5€ (~$4.28) and a preflop rake of 2% capped at 1€. We'll have to wait and see how long this takes to kill the cash games.
A similar license and tax scheme has been proposed in the U.S. Congress: a scheme which has the wholehearted support of the so-called Poker Players Alliance (h/t Grange95). The pending "poker legalization" bills call for a sin tax on all deposits with a starting rate of between 7-10%. (The Federal income tax topped out at a mere 7% once upon a time too!)
In light of what's being done to French poker players (the phrase "screwed over a barrel" comes to mind), does anyone still believe the tall tales from the PPA's self-appointed representatives that the sites will simply pay the deposit tax out of their own pocket and not instead take it out of the pockets of U.S. players?
This should be a wake up call. I've refused to accept the PPA's hand-waving about how harmless these extra U.S. taxes on poker would be, and so should you.
I see no way that microstakes games could ever be profitable.
ReplyDeleteAs for the tax transfer concept, most taxes are non-transferable. For example, a store cannot pay the sales tax for a customer as a promotion. For taxes that are transferable, the tax payment is regarded as income for the beneficiary. So, if an online site absorbed the tax hit for a player, the player would owe income tax on that amount paid by the site.
Of course, where do players think the money would come from that the online sites would use to pay the tax? I doubt Howard Lederer is going to pay your deposit tax unless he knows he is going to get it back with interest via rake or other fees.
In any event, legalization requires regulation. Regulation means taxation. The days of the online poker wild wild west are nearly over.
I don't see why regulation has to mean extra taxation. Plenty of industries are regulated without extra taxation.
ReplyDeleteFor example, office copiers have to not burst into flames, the toner can't be carcinogenic, and they must not allow users to print counterfeit U.S. dollars at a whim. But if you walk into Best Buy and purchase a new copier or more ink, you don't have to pay an extra 10% federal tax at the checkout.
I'm very disappointed in the PPA because -- for all their rhetoric that "poker is not a crime" -- they are more than happy to see poker treated by the tax code just like tobacco and alcohol, as an evil which taxes must be used to curtail.
If they wanted to be honest about their advocacy in this regard then they should change their motto to: Poker is not a crime, merely a social ill.
You don't have to pay the 10 percent now, correct. Give Obama and the Dems more time, and there will be a VAT soon enough.
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