OPINION: How an overstuffed omnibus bill birthed a ludicrous tax on gambling losses

The problem with big omnibus-style spending bills — whether they’re “beautiful” or not — is that it’s pretty easy for a few horrible policy ideas to slip in without too many people noticing or caring before it actually becomes law.
Unsurprisingly, the One Big Beautiful Bill Act signed into law in July by President Donald Trump was no exception. Among the massive overspending, pet projects, policy compromises and political favoritism stuffed into the monstrosity to get it passed by both chambers, a little change to how Americans can deduct gambling losses was added to the bill in the eleventh hour.
At first glance, the change doesn’t seem that drastic. Rather than allowing individuals to deduct all their gambling losses for the year, the law caps deductions at 90 percent.
What this means in practice, however, is that if a gambler lost money, broke even or just barely managed to come out ahead for the year, they may very well end up owing taxes to Uncle Sam on money they don’t have.
Unsurprisingly, gambling professionals are less than thrilled about the change. As a result, casino executives, including Derek Stevens, have been sounding the alarm on the issue, warning that nonsensical tax bills could end up chasing gamblers away from the tables in Vegas and elsewhere.
Luckily, a bipartisan effort to fix the 90 percent deduction is underway. Rep. Dina Titus (D-NV) has sponsored a bill to restore the previous 100 percent deduction, and this week Rep. Andy Barr (R-KY) signed on as a co-sponsor.
Despite the bipartisan support, however, movement on the issue has remained painfully slow. Earlier this month, House leadership refused to let the issue move forward as an amendment on an unrelated bill — meaning it might not get resolved before the end of the year.
The real problem, however, goes beyond the ridiculous nature of taxing gamblers on money they lost. Instead, it’s that our nation’s leaders have broken the legislative process to such a degree that nonsense like this can even become law in the first place.
Reducing deductions to 90 percent wasn’t just bad policy, it was the result of a bill so sweeping, disjointed and full of unrelated pet projects that many lawmakers — let alone members of the general public — had no way of knowing what was in it before it was passed.
Didn’t Republicans used to mock House Speaker Nancy Pelosi (D-CA) for saying something about passing legislation before the public knew what was in it?
Such cavalier disregard for actually understanding the legislation they vote on is just one example of how lawmakers have broken our legislative system.
For starters, it’s been nearly 30 years since lawmakers in Washington, D.C., have passed a full budget, with the government instead operating on an endless string of “temporary” continuing resolutions and stopgap funding mechanisms. And even still, lawmakers have shown no interest in approving or finalizing such slapdash spending authorizations in a timely fashion. On average, it has taken 117 days for lawmakers to finalize such spending each fiscal year — a track record that would get virtually any private-sector finance committee fired rather quickly.
And it’s not just Congress’ inability — or flat-out refusal — to pass a federal budget that is evidence of just how broken the system is. As the constitutional expert Ilya Shapiro has argued, much of modern “lawmaking” in Congress is little more than delegating authority to the executive branch — effectively passing the buck on hard decisions to unelected government agencies.
As others have argued, lawmakers in Congress have even been more than happy to abandon their responsibility to limit the president’s war powers — with Republican and Democratic presidents embroiling us in military operations without congressional approval.
The motivation behind such legislative dysfunction is simple to understand: Our elected representatives don’t enjoy the political accountability of deciding who to bomb, what to regulate or how much to spend. Such decisions tend to invite public scrutiny, so lawmakers instead defer their responsibility to the executive branch or hastily pass massive bills that are so chock-full of last-minute deals there’s little time for robust public debate or deliberation.
In other words, Congress has long been uninterested in doing the gritty job of actually governing in a way that allows voters to hold them accountable. In such a system, unintended consequences are the natural result.
That sort of “swampy” lawmaking is certainly beneficial to the lobbyists and Washington insiders who generally find long, drawn-out public debates on their pet projects to be risky — but for the rest of us, it results in unnecessary political battles as we work to undo nonsensical policies that should never have become law in the first place.
To be sure, there’s still plenty of opportunity for the 90 percent deduction to be corrected before tax day next year. However, the governing failure that allowed the provision to worm its way into the massive omnibus spending bill is a larger problem that has long loomed over our democratic process.
And considering we can’t even get our lawmakers to pass a budget nowadays, it doesn’t feel like it’s a threat being taken seriously by anyone in Washington.
Michael Schaus is a communications and branding expert based in Las Vegas and founder of Schaus Creative LLC , an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him on Twitter @schausmichaelor on Substack @creativediscourse.
