New Bill Would Fund Social Security from Internet Gambling

A Washington state congressman introduced legislation to amend the Social Security Act in order to establish a trust fund that would be filled by taxing Internet gambling in the United States. This is House Rep. Jim McDermott’s second time introducing a bill that pushes for taxation and regulation of Internet gaming.

The act is the Investing in Our Human Resources Act of 2008 (H.R. 6501), and the fund would be used to “provide opportunities to individuals who are, or were, in foster care and individuals in declining sectors of the economy,” according to its introduction.

McDermott was not available for an interview due to his schedule, according to his media director.

According to the Safe and Secure Internet Gambling Initiative (SSIGI), the Social Security Administration would receive an average of upwards of $1 billion a year by regulating and taxing online gambling over the next 10 years. SSIGI is a dot-org lobbying organization that “promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions.”

McDermott’s resolution doesn’t estimate the amount that could be earned by tapping into online gambling’s earnings pipeline, nor does it define how the United States government should go about taxing and regulating the industry it is currently trying to snuff out. This bill simply stakes a claim for a chunk of online gambling revenue that currently passes to and from American customers for Social Security. It was introduced July 15 and has two co-sponsors, Connecticut Rep. John Larson and California Rep. George Miller. All three men are Democrats.

The lawmaker introduced his first bill concerning online gambling in March. H.R. 5523, the Internet Gambling Regulation and Tax Enforcement Act of 2008, calls for an amendment of the Internal Revenue Tax code of 1986 to regulate and tax online gambling.

H.R. 5523 calls for the IRS to set up office to license, regulate, and collect taxes from online gambling companies. This bill calls for the online sites to pay a monthly licensing fee, company taxes, as well as to collect taxes from its players for the government. That bill has no co-sponsors.

This proposal remains in the House Ways and Means committee, as does H.R. 6501, mentioned above. (H.R. 6501 also is in the House Labor and Education Committee.)

Both the bills can be viewed in their entirety at the Library of Congress website. Simply use the H.R. numbers as search values to find them.