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SEC 70114 is unconstitutional.
• Introduced by @MikeCrapo
• Limits deductions to 90% of losses.
• Win $100k / lose $100k → IRS taxes $10k you never kept.
• The 90% cap violates the Sixteenth Amendment because it taxes something that is not “income.”
• Under Eisner v. Macomber (1920) income must be a “gain derived” from capital or labor.
• Under Commissioner v. Glenshaw Glass (1955) it must be an “undeniable accession to wealth, clearly realized, over which the taxpayer has complete dominion.” When a gambler’s wins and losses net to zero, there is no accession (increase) to wealth.
This phantom "income" tax will go into effect starting tax year 2026. @repdinatitus is working on a bill that would reverse this unfair anti-gaming tax provision. Let's hope common sense prevails and this is quickly reversed before 2026 gets here.
#Kill70114 #StopHiddenTax
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