Tax Analysts Blog

Casino Taxes for Horses or Children?

Posted on Feb 5, 2014

Horse racing has been a dying sport since Nathan Detroit bet on a horse named Paul Revere in Guys and Dolls. In Pennsylvania, the schools are broke. So naturally, when governments need money, they turn to a moribund pastime to pay the bills. Rep. Todd Stephens (R) has proposed taking money from something called the Race Horse Development Fund and giving it to the schools so that Johnny and Janey can learn to read the tote board. Pennsylvania -- which is starting to rival California in its fiscal nuttiness -- takes 12 percent of its casino slot revenue and gives it to the horse track owners. The owners, in turn, use it to enhance the prize money to lure bettors. This is apparently a gift. You need only be a racetrack to receive the money. Why Pennsylvania would do that is beyond me. The state takes money from gray haired ladies pumping their dead husbands' pensions into the slots and gives it to cigar-chewing guys escaping their nagging wives by playing the ponies. Stephens, to his credit, wants to give the money to their grandchildren so they might learn something useful, like gambling is addictive and regressive. According to a great article on Philly.com, similar proposals have been made before -- and the racehorse industry has killed them all with a vengeance.

Apart from the sheer ridiculousness of taking casino slot revenue and giving it to rich track owners, this episode illustrates a much bigger problem in Pennsylvania. The state needs more money for schools. Aren't schools important enough to warrant real, broad-based taxes? Shouldn't we ask everyone to open their wallets and pay more income, sales, or property taxes so that we can purchase this valuable public good? Why are we asking casinos to pay for schools rather than just for horses?

Read Comments (1)

John W RodatFeb 4, 2014

Dry topic. But NOT dry writing. And right on point.

Kudos!

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