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October 2, 2014

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Letter to the editor:

Kudos to Ron Paul for tax proposal

Regarding Ron Paul’s recent guest column, it’s nice to see a politician who demonstrates a down-to-earth, issue-specific stance on unfairness. Mr. Paul is obviously in touch with mainstream America. Taxing the tips of minimum-wage earners based on some formula, with no proof of such income actually being received, is un-American at best.

As more and more states turn to gaming for revenue enhancement, he should also address the unfairness of the tax on slot/poker winnings in excess of $1,200. Currently, only those who itemize are allowed to deduct gaming losses against those winnings regardless of one’s ability to prove such losses. Thus, the more affluent, (homeowners, etc.) get a free ride while renters don’t.

Another example of the rich getting richer while the poor get poorer.

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  1. Mr. Lyons,

    You may not be aware of it, but as it stands now, a person who has recently bought a home at today's depressed prices is better off taking the standard deduction than itemizing to get the mortgage interest deduction. I know from first hand experience.

    That said, I agree that having to pay taxes on a W4-g with no means to report offsetting losses is not right. At least if you play poker your winnings are mainly cash and are not tracked unless you hit a jackpot hand.

  2. I agreed with David until he played the "envy the rich" card. What others make is really none of his business unless they gained it illegally. David should concentrate on increasing his wealth, not denigrating those who may or may not work harder and longer hours than he does or is willing to do. David expends a lot of time and energy that would serve him better if he used it to better his station in life. We have enough "parasites" in the USA living off the sweat of others. The "politics of envy," while pushed hard by Osama Obama, is a waste of time.

  3. You do not need to be an itemized tax payer to take gambling losses against winnings but you will have to file a 1040, not 1040ez..
    Most people who receive tips make far more than min wage and I doubt any really want to declare the actual amount of tips they receive and pay the true tax due. The idea is quite dumb on the part of Mr. Paul.

  4. Peter is right. Who would want to be audited over tips? The burden is on the taxpayer to prove income and deductions. In the old days -- before the IRS deal on tips now complained of by the letter writer and Dr. Paul -- people with tip income were subject to being reamed on audit because they could not establish their true income, but had to take time off from work to try to do so: (1) at audit and, later (2) in tax court hearings. The IRS would point out (A) the discrepancy between life style and income reported on the taxpayer's returns, and (B) studies done on tip income of like employees in like jobs. The results for most people were really brutal -- there were a lot of IRS seizures of homes, cars, valuables, and accounts.

    For most taxpayers, the new IRS formulas for tip income are fair -- and they eliminate the need to keep records for 20 years (the statute of limitations for fraudulent or negligent failure to report income [and what failure to report income cannot be claimed to be either fraudulent or negligent?]).

    The letter writer illustrates that some people can complain about anything. They can complain about the pain and then, when the pain has stopped, they can complain that the pain has stopped -- and point out that we ought to change things so that we experience the pain again.

  5. The tax deduction for wins/losses based on gambling monies wagered, is a WASH. You can't deduct losses that exceed your winnings, AND THAT'S THE WAY IT IS.