11-11-08 - Poker Taxes

There's a story going around that the winner of the WSOP will be hit by a 73% tax rate in his home country of Denmark. Poker players roundly call it "ridiculous" and "awful" and say what's the point of winning blah blah.

I'm not sure exactly where I stand on the issue. I do think it's a bit retarded that gambling is taxed even higher than income in some cases. It should at most be taxed as high as stocks. I can see a certain argument that gambling shouldn't be taxed - I mean if you imagine two guys each put in $50 and flip a coin to see who gets the whole $100 - if you take 50% taxes off that, it means the winner only gets $50 ? (well, not exactly, but you get the point, kind of). Why should it be taxed at all, it's just a transfer of money? But by that logic you could argue for not taxing anything.

Anyway, that's not the point. The interesting thing is that all the people who are so upset about this "travesty of excessive taxation" are horrible poor low level gamblers who will never win anything and never be subject to these taxes, but they're still really pissed on behalf of the winner. It finally made me realize where that sentiment comes from. It's the same thing that makes all these morons play the lottery. They are not thinking in their own best interest. They are far better off when the rich pay high taxes, because these dumb fucks will never be rich. But they want to be able to dream. They've basically given up on actually improving their lives in a real way. They have given up logic and action, and they now only live in fantasy. Fantasies where they might win the WSOP Main Event and get rich, fantasies where they might win the lottery, fantasies where they can buy a house on a subprime mortgage and it will appreciate fantastically and they'll get rich. And they want the taxes to be low so that when they get all this money in their fantasy, they get to keep it all.


Nathan said...

Correct me if I'm wrong, but you are usually allowed to deduct your 'base' cost from your winnings. So in your $50 coin flip example, you would have won $100, but you would be able to deduct your $50 entry fee as your base cost, so at a 50% tax rate, you would still walk away with $75 (but only $25 profit).

brian said...

Yeah, the American Dream has this total dark side where all people adamantly support the rights of the rich because of the notion that hey, with enough pluck and determination, anyone can be rich!

Yet another way people don't actually use realistic risk/probability analysis to make behavioral decisions. Ironic when it's poker players.

old rants