Tax Reform Bill Includes Internet Gambling Regulation

A tax reform bill being pushed by US Senators from both parties uses regulation of Internet gambling to pay for simplifying and eliminating confusing tax codes.

A new bill designed to reform and simplify the Byzantine tax codes of the US contains provisions to regulate online gambling. The Bipartisan Tax Fairness and Simplification Act of 2010 would tax Internet gambling operators in much the same fashion as proposed by Barney Frank's proposal to supersede the UIGEA and license online gaming sites.

The bill, brought forward by Republican Senator Judd Gregg and Democratic Senator Ron Wyden, would reduce the labyrinthian process of filing individual taxes to a simple task of filling out a single page for most residents, eliminating the almost $200 billion wasted on preparing tax forms. Taxpayers could even ask the IRS to give them a completed tax return to review and sign.

The bill reduces costs and taxes on Americans making $200,000 or less annually, and gives corporations a break with a flat tax designed to make US companies more competitive.

The reforms are made possible by reducing tax breaks and loopholes, and by drawing revenue from previously untaxed sources such as online casino and Internet poker companies. Estimates from bipartisan study of regulatory measures before Congress show that the US could reap as much as $42 billion in the next decade from taxing the Internet gambling industry.

"With so much media focus on the differences between Democrats and
Republicans in Congress, this bipartisan initiative highlights the growing
support on both ends of Capitol Hill for replacing the failed prohibition
on Internet gambling with a system to regulate the industry, protect
consumers and generate billions in new revenue," said Michael Waxman,
spokesperson for the Safe and Secure Internet Gambling
Initiative, in a written statement.

Waxman went on to praise Wyden and Gregg for crafting the bill.

Wyden had previously proposed that health care legislation be funded by regulation of online gambling, only to withdraw the idea after Senate Majority Leader Harry Reid came down sharply against the licensing of Internet gambling to pay for the medical package. Reid receives a huge amount of campaign funding from Nevada land casino interests.