Issue 362 Is Gambling Income? June 20, 2014

I say it is not. Gambling is a game of chance, and depending on the circumstances a game of skill too.  However, the Federal and State governments don't agree.  They see it as income so as to collect all that tax revenue.  So here I make my case as to why they, the government, is wrong.

Not earned:  For one, income is earned.  So you actually have to work for it.  In the case of gambling, you are simply playing some game or betting on an outcome.  As such, you expend a zero amount of physical labor to procure your winnings, and that is assuming that you win anything in the first place.  However, you may have to think (them gamblers loose so many calories by thinking right?).  By expending thought, are you expending labor?  Again I say no.  You think on a constant basis in all forms of decision making.  As such, thinking is not an act of labor but an action that occurs in everyday life.  Thus reason one as to why gambling winnings is not earned.

Not earned 2:  On the flip side, the government will seek to gather whatever money it can wherever it can.  As such, the government considers gambling winnings income.  However, I would argue that they are using a definition from the more "progressive" side of politics (this is not the good form of progressive thinking).  They view acquiring a certain amount of money income based on the fact that it may be unfair that the other people do not earn as much in a set amount of time.  In short, they want to punish you for achieving a victory against the "literal" odds.  Case in point is when you are taxed for receiving a set amount of money as inheritance or as a gift.  In the case of New York, if you receive anything in the value of $10,000 or more (not just as money, but the equivalent or greater value in property) you are then taxed on it. Likewise, the Federal government does the same with its Estate Tax, which is better known as the "death tax."  In the Federal government’s case, the taxed value is money received in excess of about $5 million. So this unfair advantage mentality is what drives them to consider money won by gambling the same way they do with getting free money from the death of a family member.  In short, it comes down to the foolish notions of fairness.

Conclusion:  So we have the fact that money won by gambling is not income based upon zero labor being used to "earn" it. Also, we have that the government is expressing the foolish notions of people complaining that someone has got more money than them "almost" for free.  My response is this, government, stay out of gamblers pockets.  It was never earned so you should not even remotely think that you can steal it from them.  Also, you people who think the world is unfair because someone got free money, try minding your own business.  Focus on what you have, not what others have for a change.