The Stupidity Tax
Anne Martens
While I do plan on winning eventually, and I find the "not to be played for investment purposes" disclaimer hilarious, does anyone really think that basing a state economy on gambling is a good way to go?
Ok, so it works for Nevada. And Oregon is seriously lacking a proper venue for the Wayne Newton's and Celine Dion's of the world. And we definitely need more neon.
The Big O notes that we spend $310 per person per year on gambling. I suppose feeding a machine with blinking lights is way more fun than feeding the state coffers directly. Why not take a realistic look at the chances of winning and call it what it is: a stupidity tax.
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4:31 p.m.
Dec 22, '04
Anne, a little tidbit for ya. In Nevada, there's not a single game to be found anywhere that pays out less than 95 cents on every dollar wagered. Many games pay between 97 and 99 cents on the dollar.
In Oregon, our video poker machines are tuned to pay out 58 cents on the dollar.
Gambling's fine, but Oregon video poker ain't gambling. It's robbery. If we brought one of those machines to Vegas, we'd go to jail.
Dec 22, '04
... and a stupidity tax is what it is, and we'd perhaps have no problem with it, except that not only the gambler pays the cost of the gambler's missunderstanding of the odds.... the gambler may have minor dependents and others who have a claim on his or her resources.
If you could automagically recycle the dollars back to the children and spouses who depend on "stupid" gamblers, then you could undo the damage.
If you believed that only 50% of gamblers were damaging their dependents then you could even improve the lives of their dependents by "taxing stupidity", channeling dollars from the harmlessly stupid to the dangerously stupid.
IF IF IF.
But of course you can't begin to get the money back to the kids and families who really need it, not after the private operators and state take their administrative cut, and not when you consider the targetting problem of figuring out who was hurt and who was not.
People have a right to be "stupid", but the state has no obligation to make it easy for them.
(Yes I have played the lottery a few times in my life.... exercising my constitutional right to irrational thinking... but I don't think the state was doing me a favor by making that possible.)
(Yes, personal responsibility is an important principle, but you don't put a stumbling block before the blind... least of all as a matter of public policy.)
6:05 p.m.
Dec 22, '04
That's why it's important to add a tax bracket in this state that will only pull an additional .5% or so on the portion of an individuals income above $50,000 or a family's income above $90,000. Look at my article: Progressive Tax Bracket Reform. We have inconsequential tax brackets in this state. We have a flat tax!
Stop stealing from debauchery to give to the poor. That's stupid.
9:20 p.m.
Dec 22, '04
Hi, I'm stupid. Please tax me! (Wish me luck in Reno this weekend!).
JES
Dec 22, '04
I agree with Kari. We're overdue for video poker reform. Perhaps we could pass a law to mandate that a full house pay better than 8-1. Or we could take it to the ballot if the legislature won't pass it. (Now that's an opening for Bill Sizemore to come back to life with an Oregon Gamblers United.)
More to the point: Vegas supports a lot of good family wage jobs, which is why the casino operators joined forces with the labor movement in Nevada to oppose Wal-mart and pass a minimum wage increase this year. In Oregon, we have tavern owners who rake in sizable profits from their video poker terminals and pay their workers only minimum wage and no health benefits, forcing those workers to resort to the Oregon Health Plan. This is the worst of both worlds: games that chisel on payoffs for the players and tavern owners who chisel on pay and benefits for their workers.
I'd be happy to support more gambling in Oregon if the players got a little better deal and the workers got a much better deal.
Dec 22, '04
Yes, I do agree that the payout needs to be 80%-90% range. But my take on this current video gambling agreement is that it should not subsidize businesses to stay in business. If you are a restaurant—your core business and source on income is the service of food. If you are a bar/tavern-your core business and source of income is the service of liquor and other alcoholic beverages. If your only reason for staying afloat is the video gambling, it is time to remove the video gambling machines. Salem needs to stop subsidizing businesses that do not need a “hand-out” to stay around as a profitable business. Especially, since those schools, law enforcement agencies and social services in Oregon; are withered fruit on a dying vine.
Dec 23, '04
People with the gambling dementia need less opportunity and more self-management agency. Although harmful, and sometimes extremely so, it's not the most debilitating vice and I do not oppose the games and tax in moderation.
In my estimation gambling is a lower priority revenue source than many others, and an issue at all, only in those districts and states where the agenda has been reduced to talking about it.
The vice category offers other taxable "harmful" "dementiae." The lore of vice lists contraband (incl. guns), perversions (incl. sexual), and superstition (incl. gambling). Tax marijuana, prostitution, and gambling, regulated in a moderation of the opportunities for it and management away from it.
But all three vice categories are down the priority list from more appropriate lines of taxation. Commerce, property, and labor seem to me (extemporaneously) to be more justifiably taxable. On the broad topic of tax theory, I'm out of my depth and it's out of blogging's depth. But I had some specifics.
Restore the state business (corporate) income tax rates to parity with individual rates. Fifteen years ago, business and individual rates were the same, maxxed at about 9%. The GOP '90s reduced business' top bracket into the 6% range, a one-third decrease. On the promise to stimulate industry, boost employment, and/or lower product prices. Each a promise broken. Raising business income tax rates can expect howls of protest, and especially a threat to increase product and service pricings to afford the tax. I doubt the claim, since prices did not go down when the business tax rate went down. State revenue was more durable when business and individual income tax rates were in parity.
In a corollary consideration, Oregon Center for Public Policy maintains a data base and publishes reports of the revenue losses in 'special business' loopholes and waivers. Christmas tree farmers get a tax loophole, for example. Ya' know, the favoritisms to business seem never to gain any favorable advantage to the public interest. Close the loopholes, eh, Chuck?
Re-calibrate property tax limits in a progressive scale. Measure 5, and sequels, capped all values of property at the one same limit, (15 per 1000 I think), and one rate like that is regressive. Step it to 20 per 1000 on properties over $300,000, say; 25 per 1000 above $500,000; 30 per 1000 above $800,000. Et cetera. Progressively amend McIntire and Sizemore.
And I think we can have a sales tax -- ten percent, say, on items selling for over $250,000. I don't buy any of these but I think of them as private yachts, planes, and motorcoaches, (Oregon manufactures some of each), furs and jewelry, (beaver pelts and gold nuggets, anyone?), racehorses, rare art pieces, (Chihuly -- got any?), and in general, things outrageously ostentatious. Usually called a luxury tax. It is a bit kludgy to apply it fairly to residential property, which is in the example price range, but buying second homes, vacation homes, retreats and lodges for upwards of $500,000, seems more unfair not taxed as luxury livings. Particularly turn any sales tax design upside down. Most states have their sales tax on everything sold, except for certain items (like medicine, food), which are listed in legislation as not taxed. Oregon should put it as no tax on anything sold, except for specific items legislation lists -- meaning: luxuries -- which are taxed.
Lastly and maybe best of all, (this proposal provokes the most intense resistance from those affected -- which is not you and me -- of any tax you can mention): Tax advertising. This idea goes back at least to the '50s, when TV was getting started and people's perception of a Madison Avenue ad man was from the book The Man in the Gray Flannel Suit, (and others), and tax advertising has reappeared from time to time since then, and there are strongly staged storms of protest each time, inevitably. Put your hands over your ears for a minute and think about it, with an eye toward seeing if as a voter you might vote for it. Fundamentally, billions of dollars are paid from party A to party B to "buy advertising" and there is no tax on that transaction or the 'gestalt' of that 'transaction.' Should someone spending $1,000,000 to buy TV time, (which is pretty much what it comes down to), have to pay some percent more? (Concrete example: A tax on advertising at Civic Stadium, like the outfield billboards, or licensing the name -- PGE Park, could pay for a stadium by paying against its bonds.
Taxing gambling is a fumbly source for revenues but it's the only place where adjustments on the state's revenue side are being talked about at all. There needs to be some consideration for revenues. If taxing the gambling vice is an issue it should validate making issues of taxing the other vices, as well, keeping the logic of it consistent in the category of stupid things to do. Sex, drugs, video poker.
<h1></h1>9:07 a.m.
Dec 23, '04
I call on Tim Nesbitt, who elected a Governor who refused to stop the dual practices of ripping off gamblers and subsidizing businesses who rip off their employees, to declare his own candidacy for 2006 or stop pretending that he cares!
9:24 a.m.
Dec 23, '04
Let's pull the plug on Sports Action and Scoreboard while we're at it. If my beloved Ducks are trotting out the Athletic Department Humvee for recruits to cover the four blocks to the practice palace that is Len Casanova Center, only to go 5-6 and lose to the Beavs, they've got too much money, anyway.
In the meantime, you have to go to Boise! to watch the Tournament in person - how messed up is that?
11:54 a.m.
Dec 23, '04
I've never minded that the state is the largest drug dealer, because alchohol is a little harder to get under this system.
This is not the case with gambling. How could any serious progressive endorse the fleecing of the ignorant to fund any number of programs, no matter how vital. The state is enabling an addiction that afflicts those least likely to succeed in the Dog eat Dog system that we refer to as the free market.
Besides when I go to the convenience store to score my carcinogens, these guys are at the counter holding up progress as they "win" the right to more scratch and sniff lottery tickets and do their business right there in front of me.
Leave the gaming to the Tribes. At least that involves a little poetic justice.
12:38 p.m.
Dec 23, '04
I think it's unfair to call people ignorant of their "fleecing." They (we, I) know it's a chance. I don't play it that much, but I have--and I have other amusements I pay for that offer no chance at all of return. Maybe some are unwise to the odds, but every body gets that your chances aren't good.
Regulated gambling is no different than regulated alcohol--certainly abusable, mostly harmless for most, nearly inevitable among the population in some form, better controlled as a government operation. Las Vegas is better, not worse now that the mob is pushed to the side.
Dec 23, '04
"How could any serious progressive endorse the fleecing of the ignorant to fund any number of programs, no matter how vital."
I can't help thinking this is some kind of covert libertarian critique.
Hmmm.
2:28 p.m.
Dec 23, '04
torridjoe, I'm not denying that some few people who understand the odds are playing because as Anne puts it "feeding a machine with blinking lights [is]......fun". Like you, I do all kinds of irrational, fun things with a full knowledge of their irrationality. I just think that your money is a tiny fraction of the total revenues generated.
Anthony, this is a straight moral criticism of people who profess altruism, but are happy to encourage the state to acquire the funds for its projects from the very people that they wish to help.
Kinda seems like social cannibalism to me.
Dec 23, '04
No, exploitative 'fleecing' of innocents' naivete is not supported by progressivism. Nor is suppression of gambling possible -- it exists, deal with it.
And dealing with it is: the moderating steps we know to take, in educational practices during formative childhood, which teach a comprehension of the phenomenon ( -- gambling 'urges' in human nature), with an informational repetoire that innoculates kids against the temptation, (by injecting a sterile sample of the real thing -- gambling addiction really exists, triggering their immune system to code a response), as best we can. It's a tax on a certain sort of stupidity, if 'stupidity' is seen in terms of a lesion in the brain.
Informed behavior modification and adaptation in childhood does not modify compulsive gambling in people born with that feature in their brain structure. Progressives' tolerance and embrace of diversity in human natures, is the political-will basis of providing (regulated) gambling as an outlet and with our other hand at the same time providing agency and facility which helps gambling addicts in self-management, in being healthy.
-- In the many instances I have seen where progressive thought sounds like libertarian thinking, it strongly tends to be where they each are given in clear and honest expression, supplemented with logical reasoning and the facts. As opposed to, and hardly ever sounding like, dogmatic dittoheads.
<h1></h1>2:42 p.m.
Dec 23, '04
Torrid Joe, you write, Maybe some are unwise to the odds, but every body gets that your chances aren't good.
I'll make a deal. If the each video poker machine included a bright yellow 2-inch-square sticker with 24-point red text that reads, "Video poker machines in Oregon pay out an average of 58 cents on each dollar wagered"... then, I'll support as much as gambling as the Governor wants.
Dec 23, '04
Steve Novick,
I call on Tim Nesbitt, who elected a Governor who refused to stop the dual practices of ripping off gamblers and subsidizing businesses who rip off their employees, to declare his own candidacy for 2006 or stop pretending that he cares!
WOW!!!!! BRAVO!!!!
I SAY STEVE NOVICK FOR GOVERNOR IN 2006!!!
Dec 24, '04
Harvard University was supported by a lottery once upon at time so let's do something different. Give the state lottery and all the gambling games that go with it to the State's universities and tell them to figure out how to run their operations on that money and not come back to the taxpayers anymore. That way when low income people play the games maybe the profits will be spent on scholarships for low income students. BCO
Dec 24, '04
Novick,,, """""I call on Tim Nesbitt,,,,,,to declare his own candidacy for 2006 or stop pretending that he cares! """"
So Steve, leap forward and Tim is governor. Or you are governor.
What does that mean?
Suppose you also had both the house and the senate too.
What then?
Tim and Steve were both big proponents of M30 as well as any and all other tax increases.
The problem is they are not in the majority or mainstream Oregon who are steadfast against the pursuit of prosperity through taxation.
So what is the progressive plan to deal with this conundrum?
I know Steve and Tim find every government agency, service and program worthy of continuation and expansion but that leaves only one path. Perpetual tax increases to fund the perpetual crisis they support.
Given that is not going to happen, what is the progressive Tim/Steve plan B?
You're in charge, you have the pulpit, the purse strings, the State.
What is your plan?
More of the same? "Do a better job of educating the public".
Thereby persuading them to hand over a little more?
And a little more, and a little more?
Please resist repeating the M28, M30 and "tax reform" rhetoric and tell Oregon what plan B is when you cannot get enough money to sustain the status quo?
Not enough for the Oregon Health Plan, for the Port of Portland, for our Universities, for CIM/CAM, for the Quality Education Model, for yet another ODE website makeover, for new assessments to replace the discarded ones, for new school report cards, for Healthy Start, the Oregon Cultural Trust, for affordable housing, for OHSU, for TriMet, for Metro, for expanding then backfilling Urban Renewal spending, and for more planning and increased regulatory bureacracies? You know. All those things which makes Oregon a "Model for the Nation".
Dec 24, '04
The hypothetical fantasy question appears:
You're in charge, you have the pulpit, the purse strings, the State.
What is your plan?
Answer: Play by the rules. Rule 1: Liberty and justice for all. Rule 2: Form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty. Rule 3: Maintain a rule for adding new rules or making an old rule newer. Understanding of these precepts and purposes -- the 'mission statement' -- ordinarily guides debate, decisions, and behaviors, more or less directly. (I.e., 'apply as needed, lather, rinse, repeat.') In the contrapositive, (the unordinary), misunderstanding or failing understanding of the mission statement and governance in it, is not a refutation of the premises. (Or, 'if you don't get it, it ain't because and it don't prove there's nothing to get.')
That's a general answer. Within that, and for the situation of our times, an earlier comment in this post offers motions for consideration which are narrowly limited on topic of tax revenuing, which could be avenues of inclusive discussion with the specialists obsessed in a whole preoccupation with this one element (revenues) in the broad array of civil self-government concerns, mores, and conducts.
To wit: ... some specifics. Tax marijuana, prostitution, and gambling, Restore the state business (corporate) income tax rates to parity with individual rates. Close the [tax exemptions] loopholes, Re-calibrate property tax limits in a progressive scale. ... a sales tax -- ten percent, say, on items selling for over $250,000. Usually called a luxury tax. Tax advertising.
<h1></h1>1:51 p.m.
Dec 24, '04
Kari-- I have no problem with the concept, and notifying customers of the payout rate is an excellent idea. We can quibble over the size of your sticker, and I think it's plausibly unfair to force vendors to post the payout of an actual machine (as opposed to the aggregate payout percentage), but payout % can also be expressed as odds, which I do think appear on screen--at least for poker. I must admit I don't recall exactly what info appears.
You're absolutely right though--honest information is a prime responsibility of government when it endorses a gambling activity, and a large part of what makes it superior to "private" gambling regulation. You know it's clean.
Dec 24, '04
Tenskwatawa,,, """"Tax,,,,,, income tax,,,,tax exemptions,,,,, property tax,,,,,a sales tax,,,luxury tax Tax advertising.""""
That's plan A. Get more taxes.
I asked about plan B when you can't get them. As with M28 M30 & the last sessions tax reform.
"""""The hypothetical fantasy question appears: You're in charge, you have the pulpit, the purse strings, the State. What is your plan?"""""""
How can the question be hypothetical and fantasy when the circumstance of not getting more tax is today's environment?
Perhaps you can not fathom a contiued failure to raise taxes so therefore there is no Plan B?
Again, I did not ask for yet another disertation on formulas for raising more revenue.
I asked what plab B is when more revenue is not and will become available.
Just pretend if need be. Play imagination if you think that is not the current situation.
Dec 24, '04
Addressing and managing "the broad array of civil self-government concerns, mores, and conducts" is Plan A, within which, revenues is one element. Is not removed. Should not be forgotten. Exists. Revenues. Usually taxes, but there's other revenues. Revenues: a valid and vital element of governance. Are not undone by announcing >poof< they are no more. Statecraft fashions its progress by combining and coordinating the elements of government. Narrow-minded obsession locks on one element blindly and sees nothing else, practices no grace.
<h1></h1>Dec 24, '04
Steve,
Enforcement is still away too getting the revenue in the coffers—though it will be still a shortfall—but 400-600 million down is better than 1+ billion. Nevertheless, some individuals think that enforcement is an act of increasing taxes and fees and that is a major no-no in the grand scheme of plans for the state in their eyes. Therefore, until we see what happens when the state ordnances of revenue, pertaining tax and fee collection and management is fully engaged and operational—there is not a chance in hell that Plan B can work since we are not letting what is on the books work?
Dec 24, '04
Aaron says, """Therefore, until we see what happens when the state ordnances of revenue, pertaining tax and fee collection and management is fully engaged and operational—there is not a chance in hell that Plan B can work since we are not letting what is on the books work?"""
Is that French? Plan B? What plan B? Did yo slip by a description I missed?
Tenskwatawa says, """"revenues: a valid and vital element of governance. Are not undone by announcing >poof< they are no more."""
I think I got this one. Is this it. When the legislature passes an unfunded mandate, experimental program, such as the Oregon School Reform Act for the 21st Century. Every school district in the state is forced to implement it with existing resources and "poof", money which was funding classrooms and basic school needs is diverted into a 13 year ultra waste instead.
Yep that's a "poof".
Of course Mr. Novick and others will defend this education fraud while clamoring for more revenue.
Governance must also include GENUINE measurments of program effectiveness.
In the case of education we have none. And I have yet to read or hear one single progressive raise this issue.
So tell me. How did program effectiveness become a conservative or progressive issue?
<h2>It sure isn't to me.</h2>