Jack Mintz: Are we taxing gambling too much?
Jack Mintz argues that high gambling taxes may drive consumers to international sites, pressuring governments to lower rates.Summary
Jack Mintz examines the taxation of gambling, noting that Ontario collected $400 million in net revenues from online betting in June alone. While gambling taxes serve to discourage harmful consumption and raise revenue, the rapid growth of online betting risks tax avoidance as consumers join international websites. Mintz references economist Frank Ramsey's theory on optimal commodity taxation, suggesting that "sin goods" like gambling should be taxed at higher rates to minimize economic costs. However, he argues that the revenue-raising objective often contradicts the goal of discouraging gambling. The U.S. taxes individual gamblers' winnings, while other countries tax operators' profits. Mintz concludes that Canadian governments, facing high debt, prioritize revenue over discouraging gambling, but this approach could lead to a shrinking tax base as gambling moves offshore.
(Source：Financial Post)