Wyden, Gregg Push Corporate Tax Cut, Online Gambling RegulationFebruary 25, 2010 - by Eric Naing
Earlier this week Sen. Ron Wyden [D, OR] and Sen. Judd Gregg [R, NH] introduced legislation that would cut the corporate income tax but also eliminate certain corporate tax breaks. Online poker fans are also excited about a provision in the bill legalizing Internet gambling.
Wyden’s and Gregg’s Bipartisan Tax Fairness and Simplification Act replaces the federal corporate income tax of 35 percent with a flat 24 percent rate. The bill also reduces the six existing marginal income tax brackets to three and eliminates the alternative minimum tax.
In a Wall Street Journal op-ed, the two senators claim their bill simplifies the tax code and will help kick-start the economy and create jobs:
By streamlining and modernizing the outdated tax code, our proposal would eliminate many of the specialized tax breaks that currently benefit one group of Americans over another. The changes we propose will create policies that benefit everyone. They include: fiscally responsible middle-class tax cuts, business tax breaks to help American companies compete globally and create jobs, and a fairer and simpler tax system for all Americans.
To make up for some of the lost revenue from the tax cuts, the bill eliminates some corporate tax breaks. The New York Times explains:
[T]he proposed tax changes are not necessarily a gift to corporate America. A key point of the plan would be the elimination of certain tax breaks for corporations, mainly for those working in the energy sector, and would also end the practice whereby a multinational company is only taxed on the income generated abroad when it comes back onshore.
Another revenue generating aspect of the bill is a provision allowing for the regulation and taxation of Internet gambling. This language was taken taken from Rep. Barney Frank’s [D, MA-4] Internet Gambling Regulation, Consumer Protection, and Enforcement Act (H.R.2267).
Online gambling advocate organizations like the Safe and Secure Internet Gambling Initiative and the Poker Players Alliance have long supported this idea and have voiced their support for this bill. A Joint Committee on Taxation study said that a similar gambling proposal could generate $42 billion over a decade.
Even if this tax bill stalls, expect the idea of regulating Internet gambling to live on for that reason. Like the tens of billions in unused TARP funds, tax revenue from Internet gambling could be used to fund any number of programs:
“This could perhaps be a sign of things to come,” said John Pappas, executive director of the Poker Players Alliance. “I wouldn’t be surprised to see Internet gambling legislation popping up in other places as a pay-in for other areas.”
You can read an official summary of of Wyden’s and Gregg’s bill here.