John McCain's Tax Returns: What Happens in Vegas, Stays in Vegas
In September 2004, we had the pleasure of shooting craps with Senator John McCain, now the presumptive Republican presidential nominee. Senator McCain was in Las Vegas to attend the Oscar De La Hoya-Bernard Hopkins boxing match. We were in town to, well, do what people do in Vegas -- including, but not limited to, gambling.
We were impressed by Senator McCain's stamina. It was well past midnight, he was on his feet for several hours (no sitting allowed at the craps table), and he was still going strong. We were also impressed by his large stack of chips. He wasn't the luckiest roller; when it was his turn to shoot, he "sevened out" after about three rolls of the dice. But the table was generally hot, so he did well betting on other players.
Senator McCain was accompanied by his lovely and statuesque wife, Cindy McCain. Every now and then, people would come over to greet the McCains. In a testament to his focus, the senator never lost track of what was happening on the table. If he can chat with well-wishers while simultaneously monitoring craps-table action, surely he can handle the economy AND Iraq.
In light of Senator McCain's fondness for gambling, we weren't completely surprised by this issue, raised by Paul Caron over at TaxProf Blog:
I previously blogged the release of John McCain's 2006 and 2007 tax returns. The Daily Kos asks why McCain has not reported any gambling gains on Line 21, or gambling losses on Line 28, Schedule A, of his Form 1040, given widespread press reports that he is a frequent gambler at casinos who wagers thousands of dollars per trip. If the press reports are accurate, it is hard to imagine that McCain would not have won at least $600 on some occasions and received a Form W-G....
We reached out to the McCain campaign for comment. From spokesman Tucker Bounds [FN1]:
John McCain has had little occasion to try his luck at gaming in 2006 and 2007, as he was otherwise occupied during that time -- and had no winning sessions. As a result, Senator McCain had no taxable income when he did.
But don't shed tears for the senator. Considering his wife's vast -- and growing -- fortune, we're sure he can handle some losses at the gaming tables.
As for Senator McCain, we wish him better luck at the craps table in the future. Hopefully he won't end up like yesterday's LOTD, Joseph Levine.
[FN1] As noted by Politico, Tucker Bounds is the younger brother of our law school classmate and co-clerk, newly appointed White House staffer Ryan Bounds (whose recent wedding we covered here).
Update / Correction: The friend who was with us at the craps table that night has a contrary recollection about the presence of Mrs. McCain:
Although Mrs. McCain accompanied John McCain on the Vegas trip (I met her earlier that day in the hotel lobby), she was not at the craps table with him. I remember distinctly that he was there with two women who were younger and much less attractive. (I also believe at least one of them had a feather boa around her neck, something, I am quite confident, Mrs. McCain would never wear.)
Why Hasn't McCain Reported His Gambling Gains and Losses on His Tax Returns? [TaxProf Blog]
(0) Comments
Firsties.
Lat, don't you ever get tired of kissing McCain's ass? Obama-bashing one day, McCain trolling the next...you should stick with legal gossip, your political analysis sucks.
This is what happens when columnist try to do tax stories and don't have a clue how various aspects of a 1040 and its accompanying schedules work.
Regardless of whether McCain didn't gamble that much in 2006 or 2007. Gambling losses offset gambling winnings. so it is entirely possible that it works out to zero. Though it is more likely that McCain lost money but can only offset the loss up to 3000. Also, because of how the tax code works certain lines in the schedule A deductions get reduced (not sure off the top of my head if gambling is one of them) based on your income. Considering he had income close to 400K it all likelihood it taking the deduction would have not impacted his taxes at all so why include any losses. If he had winnings then sure they should be included but most people generally lose when gambling.
This is what happens when columnist try to do tax stories and don't have a clue how various aspects of a 1040 and its accompanying schedules work.
Regardless of whether McCain didn't gamble that much in 2006 or 2007. Gambling losses offset gambling winnings. so it is entirely possible that it works out to zero. Though it is more likely that McCain lost money but can only offset the loss up to 3000. Also, because of how the tax code works certain lines in the schedule A deductions get reduced (not sure off the top of my head if gambling is one of them) based on your income. Considering he had income close to 400K it all likelihood it taking the deduction would have not impacted his taxes at all so why include any losses. If he had winnings then sure they should be included but most people generally lose when gambling.
Finally, a topic tax lawyers can really get excited about (see supra 11:45(1) and (2)).
How is anything in this post "kissing McCain's ass"? It notes how he could concentrate very well and stand for long periods of time during gambling sessions. If that's "kissing his ass," then so is saying "McCain is a generally nice fellow."
Guys in my high school used to pay their taxes. It was no big deal.
Taxes = TTT
11:42,
Please tell David Lat how to run the blog he furnishes to you free of charge. That or, you know, go fuck yourself.
A superfluous analysis, to say the least. The issue boils down to whether, in the aggregate, he won or lost money gambling for those years. If he won, his winnings should definitely have been reported. If he lost, he is not REQUIRED to report the losses. He may do so if he chooses, and if he chooses not to, he pays marginally more in taxes than he could have...end of story.
Co-sign 11:52. This sounds tongue in cheek:
"In a testament to his focus, the senator never lost track of what was happening on the table. If he can chat with well-wishers while simultaneously monitoring craps-table action, surely he can handle the economy AND Iraq."
He probably lost money gambling. Most people lose money gambling. Especially people with very rich spouses.
This is a non issue.
11:42 = Crazed Obama groupie
Anything that does not wildly praise Obama = "bashing."
Most people lose money gambling, but that's in part because probabilities in every game in a casino in which one plays against the house heavily favor the house (even in blackjack, the way many casinos are run now).
Makes it all the more fascinating that Obama's casino game of choice is poker (requires deliberation, understanding human thought, intelligence) and McCain's craps (requires belief that some people actually have "good luck", quick moving without deliberation, blind faith in the actions of others, i.e., the person rolling the dice).
If you're going to use this picture of McCain, could you use the picture of Obama smoking? tyia
http://savagepolitics.com/wp-content/uploads/2008/05/windowslivewritersmokeemifyougotem-12634obama-smoking2.png
Maybe McCain should have pooped in a hat for some good luck.
From the tone of this McCain ass-kissing thread, Lat probably would have enjoyed watching that as well.
Thanks, Lat. "lovey and statuesque wife"--when every other woman is a "hottie." "vast--and growing--fortune." Very subtle Hillary trolling.
Agree with 11:52. Lat's wishing McCain "better luck at the craps table in the future" was another way of saying McCain is going to lose the election. Sitting presidents rarely spend a lot of time at Vegas crap tables. McCain is an ass, but (this time at least) Lat was not kissing it.
I love the Obamabots. Lat posts about McCain's gambling habits as scandal, mocks his wife and her fortune, and includes a typical "angry" photo. Obamabots pounce on it in the comments as "kissing McCain's ass."
11:47 - You're damn right we're excited, watch this;
11:45 - Wagering losses are only deductible to the extent of wagering gains (Code sec. 165(d)) so the 3,000 rule does not apply.
I did not see any wager reporting on the Obama's tax return even though he is apparently a poker player (See http://www.time.com/time/politics/article/0,8599,1819898,00.html)
11:45 -- you are an idiot. You still have to report the gains and losses, technically. Why? It will increase your AGI and may screw you in other ways. This is actually an issue of some concern in the gambling community. It sucks, but that's the law.
That said, 99.9% of gamblers in casinos don't report anything unless they win a jackpot or some sort of tournament that requires reporting. Or if they are professional, full-time gamblers. So I give McCain a pass on this, but I'll bet dollars to doughnuts he never reported his previous gambling trips, even if the yearly net was a win.
12:03 - Way to rip off the article mentioned by 12:12.
Actually, a craps player recognizes that the game he has chosen will yield some loss -- one of the smallest losses in the casino; whereas a poker player thinks he can win against anybody (even the Iranians and North Koreans). I would rather have a craps player, who chooses a small calculated loss, than a poker player, who can lose everything depending on the table he sits down at, running my foreign policy.
WHAT PART OF "SHALL NOT BE INFRINGED" DON'T YOU UNDERSTAND ??
I would rather have a Russian-roulette player than Obama.
12:18, I'd rather have a GOOD poker player than a good craps player making important strategic decisions. The question is: is Obama a good poker player?
11:58: Failing to praise Obama means you are racist. This entire post and many of these comments are racist.
Cindy McCain "statuesque"? What statue did you have in mind Lat? Perhaps this one?
http://www.msnbc.msn.com/id/25265056/?GT1=43001
12:18 - that is a very flawed analysis for a number of reasons:
1) You assume that Obama has a lower expected payoff at a poker table than he does at a craps table. Why?
2) you imply that craps is not subject to wild swings in wins and losses, when in fact it is. It all depends on your style of play. Do you place a come bet on every roll and back up all your bets with max odds? If so, you will win and lose very fast. If you only place pass line bets and don't back up with odds, you will lose slowly. Same for poker. You can play 2-4 limit and slowly win or lose, or you can play high stakes no limit and take wild swings both ways.
12:39 is probably a racist.
11:54 ....
"Please tell David Lat how to run the blog he furnishes to you free of charge. That or, you know, go fuck yourself."
Lat does not pay the hosting out of pocket, and he earns a paycheck (as do his co-bloggers) for his work. He also solicits user comments and feedback to improve the content of his blog and to generate pageviews; it is part of the appeal of this "tabloid".
His analysis of political issues is weak, surprisingly so considering his pedigree, and unquestionably biased. Lat needs to hire a political pro to do posts like these (as he did for sports), if only to attract lightening away from his otherwise excellent work.
Whether you fuck yourself or not is unimportant to me.
-not 11:42
12:07, I love that picture.
Seriously, the way people use the kid gloves on Obama is disappointing. The pic you shared it perfect. Let's just link to it a lot and send it around to people.
Guys in my high school used to go to Vegas and bet their rich, vacuous wives' fortunes at the craps table while simultaneously gladhanding random passers-by, then fail to report their gains and losses on their Form 1040 all the time, it was no big deal.
It is interesting that none of McCain's handlers want to admit what seems to be obvious -- based on his wife's immense wealth, his gambling habit really is a mere pittance. Assuming he and his wife are worth approximately 100 million dollars, and even assuming he loses 10 thousand dollars every gambling trip, that is no different than someone with net worth of 1 million losing 100 dollars, which is about what a golfer spends on greens fees for 2 rounds each weekend, even at a public (i.e., cheap) course.
Actually, craps has the best odds in Vegas outside of counting cards - which is slowly being eliminated through those horrible auto-shuffle decks and/or no-auto shuffle coupled with horrible payouts on 21. I just hope that when McCain plays craps he places the Fire Bet - worst odds but most fun!
When will someone ask whether Rangel paid income tax on his landlord subsidizing his lease?
Actually, a good poker player can actually make money in the long run since there is no house edge, whereas playing honest craps results in a long term loss. So it is entirely plausible that Obama can expect to make money in the long run at poker (if he's good), where McCain will absolutely, without a doubt, lose money in the long run with craps.
And, single deck blackjack gives you the best odds of all the table games. But even assuming that a casino doesn't have single deck blackjack, craps gets you the best expected payout of all the table games when you make pass line (or don't pass line) bets and back them with odds. So you are assuming that the house lets you place an odds bet (which they generally do in Vegas) and that you don't make other types of bets. Once you start making other bets, you get better odds from blackjack.
mmmm....poker.....
McCain = if Charles Barkeley was white and kissed ass.
I thought you only had to report if the amount of winning was more that $9000 and that you can offset that amount with losings.
3:10 - You are confusing the gambler's income tax reporting with (a misstatement of) the casino's reporting obligations. If you win $5 playing blackjack you are technically obligated to report it on your tax return. If you also lost $10 you techniaclly are supposed to report both.
The casino has no obligation to report what is being cashed in unless it exceeds $10k. This reporting is to the TReasury Department and is no different than reporting your bank would be rquired to make if you asked to withdraw at least $10k in cash (or for that matter reporting a lawyer has to make if a client paid with at least $10k in cash). Casinos are given a free pass on other reporting even though other gambling establishments are not (the track and state lotteries have much lower thresholds for reporting-- $600 I believe).
Tax Law = TTT
Conservative posters are just wrong about the tax law. Another Arizona public official was convicted of filing a false tax return for netting his wins and losses. From the Scholl case:
"Scholl testified to his belief that he could "net out" his
gambling wins and losses in any particular year and, if losses exceeded wins, nothing needed to be reported on the return.
He did not, however, "net out" gambling winnings that were reflected on Forms W-2G.
On December 5, 1995, a grand jury in Tucson, Arizona, returned an indictment charging Scholl with filing false tax returns for the years 1989 through 1994..."
Do you really believe McCain never had a single winning session in two years? Let's see the prior year returns.
Better yet - let's see the Casino win/loss runs for John McCain.
We should keep pushing this. Not because of McCain. But because normal citizens receive a small W-2 and get caught up in all kinds of harassment based on the moralistic tax laws pertaining to gambling.
mrick