There’s a mystery afoot on Capitol Hill. Tucked within the Republican megabill President Donald Trump signed on July 4 was a tax provision that surprised most, if not all, of the Republican members of Congress who voted for it. The provision limits the amount gamblers can deduct from their income taxes based on their losses — and nobody seems to know how it got into the bill.
The riddle before us is a reminder that our lawmakers don’t always know all the relevant details of the legislation they’re being pushed to support. It’s also why, if only to save themselves embarrassment, these GOP senators would have done well to resist Trump’s arbitrary demand that they give him a “big, beautiful bill” to sign by the Fourth of July. The American public deserves better than lawmakers who prioritize passing a bill by an arbitrary deadline over knowing exactly what their vote will do.
Like the most interesting crimes in the Holmesian canon, it’s not the “what” but the “how” that’s most intriguing.
The new limitation on gambling deductions could be seen as good public policy given the new revenue it brings in from an extremely niche (and relatively unsympathetic) interest group. By Washington standards, though, the insertion of the tax provision into the bill is a major scandal. And like the most interesting crimes in the Holmesian canon, it’s not the “what” but the “how” that’s most intriguing.
Currently, when professional gamblers report their income taxes, they can deduct the entirety of their losses against their winnings. But language in the nearly 900-page legislation says that starting next year they’ll only be able to deduct 90%. That might not sound significant, but as The Washington Post explained, it’s a major problem for people who make their living playing the odds:
The change poses an existential threat to professional sports bettors, known as “sharps,” because they typically grind out profits from narrow margins, wagering huge sums to make a living. Under the new bill, gamblers who win $1 million and lose $900,000 in a year will be able to deduct just $810,000 of those losses, meaning they will pay taxes on $190,000 despite taking home $100,000.
The pro-gambling world is up in arms over the bad hand it’s been dealt and already pressuring Congress to reverse the shift. It seems like the odds are good that that effort will succeed, as Nevada Democrats are already drafting legislation to support one of their state’s largest and most politically powerful industries. (The estimated $1.1 billion in tax revenue the provision would have raised is apparently not enough of a jackpot to let it ride.)
But as HuffPost reported Tuesday, there’s not just concern over the terms of the provision; there’s the mystery of where it came from. Republican Sens. Chuck Grassley of Iowa, John Cornyn of Texas and Thom Tillis of North Carolina all sit on the Senate Finance Committee, which had jurisdiction over the tax parts of the bill. None of them could say where the gambling deductions provision came from, nor do any of them appear to be fans of it. Tillis, who ultimately was one of three GOP senators to vote against the budget bill, said: “I was so focused on Medicaid, I wasn’t looking for other reasons to be against the bill. But that would be another one.”
The Washington Post reported that a spokesperson for Sen. Ron Wyden, of Oregon, the ranking Democrat on the finance committee, “couldn’t explain the motivations behind the change — ‘The Republicans wrote this one on their own,’” but speculated that whoever put it in was looking to add new revenue in accordance with Senate budget rules. Whatever the reason, it is already proving to be a headache for Senate Majority Leader John Thune, R-S.D., who should be focused on the next looming issue his caucus is facing, not looking back at what was already done.
What’s most concerning isn’t that this provision passed through both chambers of Congress without notice. It’s that it isn’t even the first mystery text discovered within the legislation. It was only at the last second that Republican senators removed a surprise tax on renewable energy projects that had been slipped into the bill.
“It’s a secret, I guess,” Senate Budget Committee Chair Lindsay Graham, R-S.C., told NBC News when asked about the energy provision’s provenance. “I don’t know where it came from.” Sen. Lisa Murkowski, R-Alaska, was equally flummoxed: “It wasn’t part of any consideration. It’s like, surprise! It’s Saturday night. And we looked at it like, where did this come from?”
Senators weren’t the only ones caught flatfooted during this highly rushed and arbitrarily timed process. When the House passed its version of the reconciliation bill in May, many members hadn’t had time to read the whole thing before being pushed to vote “yes.” When confronted about the unpopular items they’d approved, either by constituents at a town hall or by Elon Musk on X, several House members, including Rep. Marjorie Taylor Greene, R-Ga., had to admit they didn’t exactly know what they’d voted to approve.
The saga speaks to how unserious the legislative process really is when an entire session’s agenda is crammed into one must-pass bill. (The entirety of the landmark Civil Rights Act of 1964 was just 28 pages!) But as the use of the filibuster has increased in the Senate, so too has the length of the dwindling number of bills that make it past the 60-vote threshold. It’s also meant that reconciliation bills especially have become gargantuan.
Unlike most good mysteries, this one is missing a satisfactory conclusion so far. Our lack of a solid suspect is at least partially due to how few legislators these days spend their time crafting laws. It’s possible a GOP staffer wrote the text without ever getting direct sign-off from their senator. It’s also possible we never find out whodunit.
Whether this case is ever solved, Thune has every reason to bet that his caucus will blindly provide him the votes he needs when the chips are down. There are literally billions of dollars at stake every day in Washington. But with the lack of care on display from Congress, how that pot gets doled out, and who winds up upset at the results, can be left to chance.
