An effort to revert the gambling loss deduction back to 100% failed this week in Washington D.C., sending proponents back to the drawing board in an attempt to fix the tax changes from the Trump Administration's One Big Beautiful Bill.
The latest volley was a push through the House Rules Committee with an amendment to an appropriations bill (H.R. 7148), but that failed when the group adjourned without adding the amendment on Thursday morning.
Changes to the surprise provision appeared to be gaining support during testimony, where Rep. Dina Titus (D-NV) spoke before the committee during a marathon session that included over 80 proposed amendments on Wednesday evening.
'A common sense policy'
"Under the new limit, if a person wins $100,000 and loses $100,000 in the same year, that net is zero," Rep. Titus said before the House Rules Committee on Wednesday. "But under the new provision, the person would still be taxed on 10% they never earned."
It's a fairness issue, she said.
"For decades our tax code allowed you to deduct 100% of any gaming losses from your wins," Rep. Titus told the committee. "It was a common sense policy. It was fair. It recognized reality. People should only pay tax on money that they actually earned. Not on phantom money, not on ghost money."
Bipartisan support is building, as well. Rep. Titus noted that 25 other legislators are now behind the issue, which would restore the full 100% deduction, including Rep. Max Miller (R-OH), who spoke on behalf of the amendment.
"This bill restores the original rule," Rep. Miller said. "Americans should not be taxed on money they didn't actually take home."'
Miller previously filed a cloned version of the Senate's FULL HOUSE Act, which aims to restore the same 100% rule. The arguments appeared to land and "common sense" was the theme of the day. But "common sense" is a meme in the House Rules Committee, and Rep. Jim McGovern (D-MA), a ranking member of the group, had jokes.
"Your bipartisan amendment sounds like a no-brainer, which probably means it won't be made in order. I hope I'm wrong on that. It just seems to be common sense. Why should you be taxed on money you don't earn?"
In the end, only two of over 80 proposed amendments made it into the bill and there was no closure. The debate will now continue without a clear path to resolution, while the latest attempts to attach the issue to larger pieces of legislation have failed. Strong opposition still remains, like Sen. James Lankford (R-OK), who is opposed to restoring the 100% deduction.
Lawmakers will need to return to the drawing board and build more support in committees like Ways and Means, where pressure can build for a vote on the matter. For now, the 90% deduction stays.
