Latest news with #JointCommitteeOnTaxation
Yahoo
04-07-2025
- Business
- Yahoo
‘WTF Is Happening': Gambling Reacts to Proposed Trump Tax Changes
The latest version of President Donald Trump's tax bill includes a notable change to how poker players and sports gamblers are taxed, one that could further upend an industry undergoing rapid upheaval. Under current rules, gamblers who itemize can deduct all their losses against their winnings, meaning if they break even (or lose money) in a given year, they don't owe additional money in taxes. The bill's Section 70014 would update the tax code, capping the deduction to 90% of losses. More from $16M Trump Payout Greases Skids for Paramount-Skydance Deal What Are Sports Prediction Markets? Key Questions Answered Kalshi, Polymarket Crack $1B Valuations, Ride Political Wave That means a bettor who made $500,000 and lost $500,000 over a year, for no net gain, would owe taxes as if they made $50,000. Some bettors who lost money would still end up with an additional tax bill. The change is projected to generate about $1.14 billion in extra tax revenue in the nine years from 2026-2034, according to estimates by the Joint Committee on Taxation. The bill, formally known as H.R.1, is currently awaiting approval by the House of Representatives, and the House version does not include this provision. Should the language eventually become law, however, the shift could negatively impact many of the industry's most avid customers. 'Seriously, WTF is happening [right now]?' Alex Kane, CEO and founder of betting exchange Sporttrade, said on X. 'No one serious about betting is going to bet anymore, or at least not going to report that they do.' The tax change 'could hurt every gambler in America. Not just pros. Not just high rollers. Everyone,' professional gambler Rob Pizzola, who is Canadian, said on X. 'Potential disaster looming with the 'Big Beautiful Bill,'' Tony Dunst, a professional poker player, said on X. 'Imagine you end up down on the year in gambling AND owe taxes on your play 🤮' It's unclear how much this shift might impact gaming operators. On one hand, professional gamblers are important parts of the poker and DFS ecosystems. On the other hand, regulated sportsbooks typically limit pro bettors—DraftKings CEO Jason Robins said in 2021 that people who bet on sports for profit are 'not the kind of players we want.' The bill's broader impact may also result in financial savings for the wealthiest people in the U.S., and that could mean more discretionary spending for them at sportsbooks or casinos. 'The bill in its current form is negative for the online gaming industry,' Jordan Bender, an equity research analyst at Citizens, said in an email. 'The adjustment on tax will increase the likelihood that poker players, whales and VIPs will find other ways to gamble outside the legal framework, including moving to the illegal gambling market. If this text ultimately passes, we believe it will take time to understand the real impact for the gambling companies like DraftKings and FanDuel, but revenue could be impaired as a result.'Only about 10% of U.S. taxpayers itemize, and Bender added that the average consumer will be 'largely unimpacted by the change.' Representatives for DraftKings (Nasdaq: DKNG) and FanDuel (NYSE: FLUT) declined to comment. In addition to possibly pushing people toward illegal offshore sportsbooks, the proposed changes could also nudge more bettors toward event futures markets, like those offered by Kalshi, which have upended the sports betting industry in recent months by offering the opportunity to risk money on sports outcomes. Event futures markets are regulated by the Commodity Futures Trading Commission (CFTC) and governed as an investment, so Trump's bill does not apply. Losses in prediction markets can be written off against other more traditional investments. The tax structure for futures wins and losses 'is not perfect, but it is a model that looks more aligned with how sharp bettors think,' Pizzola said on X. While the cap on gambling loss deductions was a late addition to the bill's language, it was already on the radar of the American Gaming Association. Two months ago, AGA CEO Bill Miller sent a letter to the House Ways and Means Committee and the Senate Committee on Finance outlining his organization's tax priorities. The third item mentioned is the deduction of gaming losses, according to a copy of the letter viewed by Sportico. 'It is not only critical to maintain this deduction for taxpayers who itemize, but—as a matter of fairness—Congress should consider allowing for non-itemizers to net their gambling wins and losses for purposes of reporting adjusted gross income,' the letter said. Gambling loss deductions have been in the spotlight before. In the discussion leading up to the 2017 Tax Cuts and Jobs Act, the initial tax overhaul from Trump's first administration, there was talk of eliminating the loss deductions entirely. Many in the industry have worried that fighting hard against smaller reductions could reopen those more extensive conversations. An AGA representative declined to comment on the current language in the proposed tax bill. If the bill is approved by the House of Representatives, there would still be opportunities to reverse the changes in the future. In an interview with Fox News earlier this week, Speaker of the House Mike Johnson said the House planned to put forth two more reconciliation bills during this congressional session, and lawmakers are already publicly talking about potential changes to this specific part. 'Buried within the BS Republican Budget bill is a provision that harms poker players and those who gamble by limiting loss deductions,' Dina Titus, a Democratic congresswoman from Nevada, said Wednesday on X. 'I'm working on a legislative fix that fairly treats gaming losses in the tax code.' Best of Most Expensive Sports Memorabilia and Collectibles in History The 100 Most Valuable Sports Teams in the World NFL Private Equity Ownership Rules: PE Can Now Own Stakes in Teams Sign in to access your portfolio
Yahoo
03-07-2025
- Business
- Yahoo
Who Won and Lost in Trump's Tax Bill
(Bloomberg) -- Business investors and wealthy Americans are among the biggest winners in President Donald Trump's tax bill. Those hit the hardest by the sweeping package include elite universities, who face new levies, and immigrants. NYC Commutes Resume After Midtown Bus Terminal Crash Chaos Struggling Downtowns Are Looking to Lure New Crowds Massachusetts to Follow NYC in Making Landlords Pay Broker Fees Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals What Gothenburg Got Out of Congestion Pricing The House is on track to pass the bill Thursday with Republican votes just a day ahead of Trump's self-imposed July 4 deadline. Here's who won and who lost in the legislative centerpiece of the president's domestic agenda: Winners Multimillionaires The rich gain the ability to pass more wealth on to their heirs and dodge a tax increase. The bill includes $4.5 trillion worth of tax cuts, according to a Saturday estimate from the Joint Committee on Taxation. The estate tax exemption rises to $15 million for individuals — totaling $30 million for married couples — and then adjust with inflation. The 2017 Trump income tax rate cuts also become permanent, with benefits skewing toward the wealthy. Residents of High-Tax States The limit on the state and local tax deduction rises to $40,000 annually for a five-year period. The write-off phases out for taxpayers who make more than $500,000 per year. After the five-year period, the limit snaps back to the current $10,000 limit imposed in the 2017 tax law. Small Business Owners The 2017 law that allowed pass-through business to deduct up to 20% of their qualified business income from their taxable income is permanently extended beginning in the tax year 2026. The deduction is available to owners of sole proprietorships, LLCs and partnerships. Private Equity The carried interest tax break benefiting private equity, venture capital and real estate partnerships is maintained, despite the president's push to eliminate it. Private equity also won an expanded interest expensing tax break. Domestic Car Dealers Up to $10,000 a year in loan interest for US-made cars becomes tax deductible through 2028, a boon to auto dealers looking to close sales. But the break phases out slowly for individuals with more than $100,000 in income and couples with more than $200,000. Manufacturers The bill revives several favorable tax rules for businesses, including bonus depreciation for the cost of production upgrades and a research and development tax break, winning the endorsement of the National Association of Manufacturers. The final legislation makes permanent those breaks, which were temporary in an earlier version of the bill that passed the House in May. Fossil Fuel Producers Industries like coal, oil and natural gas win tax breaks and new requirements to open up more federal land for drilling, while breaks for competing clean energy technologies are phased out. Elderly and Tipped Workers In a nod to some of Trump's populist campaign promises, taxpayers 65 and older get a larger standard deduction, while tips and overtime pay are exempted from income taxes. The provisions include limits to shrink their cost and expire after 2028. Parents The maximum child tax credit increases by an additional $200 from $2,000 starting in tax year 2025 and is permanently indexed to inflation. Parents could open up new 'Trump accounts' for their babies seeded with $1,000 from the government for children born from 2025 through 2028. Telecommunications The bill auctions off a massive amount of radio spectrum for use in wireless broadband, a potential boon for services like SpaceX's Starlink and 5G and future 6G mobile networks. Corporations Other tax increases that had been considered that would have hit big business, such as an increase in the stock buyback tax or a limit on the state and local deduction for corporations, were mostly rejected. Defense Contractors The package boosts defense spending by $150 billion, with much of the funding going to new weapons systems made by major contractors. Space The bill provides nearly $10 billion to fund projects including efforts to reach the Moon and Mars and eventually decommission the international space station. Losers Low-Income Americans Some of the costs for the tax bill are defrayed through cuts to Medicaid health coverage and food stamps, both of which benefit low-income Americans. On average, the legislation will cost the bottom 20% of taxpayers $560 a year, according to a Yale Budget Lab analysis. The measure creates new work requirements for Medicaid recipients, unless they are elderly, disabled or have children under 14 years old. Medicaid beneficiaries who gained eligibility through the Affordable Care Act will have to pay a share of costs through charges like co-pays. Food assistance for low-income Americans is cut by expanding existing work requirements for federal food stamps to cover beneficiaries up to 65 years old. Beginning in 2028, states also are required to pay a portion of food benefit costs, which are now fully paid by the federal government. Renewable Energy Clean energy industries are hit by the Republican plan, which rolls back many provisions of former President Joe Biden's landmark climate law. A tax credit for solar panels and wind systems is quickly phased out, though the legislation takes more time to eliminate other clean electricity production and investment credits. Tax credits for energy efficiency home improvements and residential installation of solar or other clean energy upgrades are eliminated at the end of the year. Technology Companies The Senate squelched a controversial effort in the bill to prevent US states from regulating artificial intelligence, delivering a win for tech industry critics and a blow to the likes of Microsoft Corp. and Meta Platforms Inc., as well as venture capital firms like Andreessen Horowitz. Trump administration officials and GOP allies in Silicon Valley had pushed the measure saying it would prevent a patchwork of cumbersome state-by-state regulations. Electric Vehicle Makers Tesla Inc., General Motors Co. and other electric vehicle makers are hit by elimination of a consumer tax credit of up to $7,500 for the purchase of electric vehicles. Elite Universities Add tax bills to the escalating battle the Trump administration is waging against elite universities such as Harvard and Columbia. The current 1.4% tax on net investment income of private college and university endowments ratchets up for better-funded institutions. The new tiered tax rate structure climbs as high as 8% for colleges with the most endowment income per student. Immigrants Several provisions raise taxes on immigrants. That includes a new 1% tax on transfers of money to foreign countries, known as remittances. Many immigrants in the US send money to relatives in their countries of origin. The proposal also restricts some immigrants' access to tax credits for health coverage premiums. The change prevents many immigrants granted asylum or temporary protected status from accessing those credits. Gamblers Gamblers would only be able to deduct 90% of their losses against their winnings, leading to a situation where they could still owe income tax if they break even over a year or lose money overall. --With assistance from Alicia Diaz and Erik Wasson. 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Bloomberg
01-07-2025
- Business
- Bloomberg
The GOP Wants to Give Big Oil a Handout It Doesn't Need
The huge tax and spending bill under debate in the Senate is receiving a lot of bad press for what it takes from people to help defray the cost of new tax cuts for the wealthy: Trillions of dollars from federal government finances, health care from millions, the social safety net from millions more, etc. But buried in the bill is an act of charity that's not receiving nearly enough coverage. Unfortunately, it's hard to imagine a less-deserving recipient: Senate Republicans have larded the bill with several proposed new tax breaks for fossil-fuel producers to go along with similar goodies already proposed by the House. These subsidies would cost the US government $17.9 billion over a decade, according to Congress' Joint Committee on Taxation. Worse, they further cushion an industry already luxuriously shielded from the impact its products have on the health, wealth and well-being of Americans and the rest of the world.
CNN
29-06-2025
- Business
- CNN
Live updates: Republicans race to meet Trump's July 4 deadline for agenda bill
Update: Date: Title: Senate megabill would cost just over $500 billion using alternative scoring method, CBO says Content: The Senate version of President Donald Trump's agenda bill would cost roughly $508 billion over the next decade, according to a Congressional Budget Office estimate released late Saturday. The figure, however, is based on an alternative scoring method known as the 'current policy baseline,' which does not factor in the cost of extending the 2017 Trump tax cuts, which would add trillions of dollars to the federal deficit. The Senate package calls for permanently extending essentially all of the 2017 individual income tax breaks, which are set to expire at year's end. The CBO's score reflects the cost of additional tax relief contained in the Senate bill, which includes Trump's campaign promises of eliminating taxes on tips and overtime, as well as a boost to the child tax credit, an increase in the state and local tax deduction cap, and other measures. These tax breaks would add nearly $700 billion to the deficit over the next decade, according to a Joint Committee on Taxation analysis released Saturday that uses the current policy baseline. The CBO's score also takes into account historic cuts to two of the nation's key safety net programs, Medicaid and food stamps, as well as other funding cuts. The CBO plans to publish an analysis of the Senate bill using the traditional 'current law baseline,' which would reflect the expiration of the 2017 tax cuts. It's expected to show that the bill would increase the deficit by far more than the current policy baseline score. Update: Date: Title: GOP senators moved closer to advancing Trump's agenda, but key hurdles remain. Catch up here Content: Welcome to our live coverage of President Donald Trump's push to advance his agenda through Congress in one 'big, beautiful bill' — and do so in time for a self-imposed July 4 deadline. If you're just catching up, here's what to know: Senate Republicans clear a hurdle: After an hourslong push by Senate GOP leaders yesterday, the giant tax cuts and spending bill advanced from a key procedural vote in the upper chamber, 51-49. In a late-night post on social media, Trump declared a 'GREAT VICTORY,' offering praise to four Republicans who shifted their votes. What happens next: Republican leaders must now satisfy numerous holdouts in the party still demanding changes to the bill. Senate Democrats, meanwhile, are forcing a major delay tactic, forcing clerks to spend an estimated 10 to 15 hours reading aloud the entire bill. After the reading, there would be debate on the bill, followed by a marathon 'vote-a-rama' before a vote on final passage. The vote-a-rama is another headache for GOP leadership: The open-ended, hourslong series of votes on amendments will be offered mostly by Democrats and put Republicans on the spot. At least one Republican holdout, Sen. Susan Collins of Maine, has signaled she will offer her own amendments to the bill in an unusual move for a GOP bill. What's in the bill: Trump's multitrillion-dollar bill would lower federal taxes and infuse more money into the Pentagon and border security agencies, while downsizing government safety-net programs including Medicaid. Read a fact check on some of Trump's claims about the measure, and compare what we know so far about the House and Senate versions of the bill. The timeline is extremely tight: Trump has demanded to sign the bill on the Fourth of July, but the measure must still go back to the House if it passes the Senate. Saturday's vote allows the Senate to begin debating Trump's bill, teeing up a final passage vote in that chamber as soon as Monday. CNN's Nicky Robertson and Morgan Rimmer contributed to this report. Update: Date: Title: Fact-checking Trump's claims on his massive domestic policy bill Content: President Donald Trump has used some false claims to promote his massive domestic policy bill, which GOP lawmakers are racing to advance this weekend. Here is a fact check on some key remarks: Medicaid: Trump claimed Thursday that people are 'not going to feel any' of the spending cuts included in the bill. He then said, 'Your Medicaid is left alone. It's left the same.' Facts First: Trump's claim about Medicaid is false. The version of the bill that was passed by the House last month would make multiple significant changes to Medicaid and would reduce federal funding for the program by hundreds of billions of dollars. The legislation's Medicaid provisions are expected to result in 7.8 million more people being uninsured in 2034, according to estimates from the nonpartisan Congressional Budget Office. Social Security: Trump campaigned in 2024 on a promise of no more taxes on Social Security benefits. On Thursday, he said the bill is 'so good' because it includes 'hundreds of things' that will benefit Americans — including 'no tax' on Social Security. He then said in a social media post on Friday that the legislation left Republicans 'on the precipice' of delivering achievements including 'NO TAX ON SOCIAL SECURITY FOR OUR SENIORS.' Facts First: Trump's claim about Social Security is false. The bill would temporarily beef up seniors' standard tax deduction, but it would not completely eliminate taxes on Social Security benefits. Read more context on Trump's claims here.
Wall Street Journal
27-06-2025
- Business
- Wall Street Journal
Close the SALT ‘Loophole'? Not on My Watch
In 2017, the Tax Cuts and Jobs Act as originally drafted by the House targeted most of its cuts to the 5% of American businesses organized as C-Corps. I was the Republican senator who dug his heels in and insisted that the other 95% of American businesses organized as 'pass-through' entities be treated more fairly so they could stay competitive with C-Corps. I also worked with Wisconsin legislators to ensure our state's pass-throughs could deduct state and local taxes at the entity level, the same way C-Corps do. Your editorial recommends 'Closing the SALT Business Loophole' (June 25). But that's a misnomer—the provision maintains competitive fairness between businesses that choose to organize differently. Eight years ago you argued that pass-throughs enjoy a tax advantage because they don't suffer from the double taxation of dividends. The problem is that companies compete at the entity, not shareholder, level and approximately 73% of C-Corp income is attributed to nontaxable entities and never subjected to double taxation. I estimate that this reduces federal revenue by approximately $200 billion annually. Moreover, according to the Joint Committee on Taxation, in 2020 the effective tax rate was 10% for large C-Corps and 14% for small C-Corps, compared with an average 21% for all pass-throughs in 2021.
