« more part time americans | Main | mitt romney is against the auto bailout »
November 17, 2008
world series of poker
A few days ago Denmark's Peter Eastgate won the World Series of Poker. The 22 year old defeated Russia's Ivan Demidov to win $9.2 million. Eastgame won't be taxed in the United States, but thanks to Denmark's tax laws he'll end up taking home less than the man he defeated.
Denmark's tax agency is called SKAT. Denmark, like the United States, does tax gambling winnings. For casino gambling (which is where I believe this will be classified) the tax rate is 45% on the first 4 million Danish Kroners; it's 75% on income above that. Today $1 is worth 5.88907 DKK; Mr. Eastgate won 53,899,250.70 DKK before taxes. Mr. Eastgate will owe about 39,224,438 DKK in tax ($6,660,545). Put another way Mr. Eastgate will keep 14,674,813 DKK ($2,491,871) of his winnings--just 27.23% of his prize. Yes, he faces an effective tax rate of 72.77%. Ouch.It's amazing that any state is allowed to tax their citizens that much. I guess it's easy to take other people's money. Gambling is seen by many as a vice so I guess excessive taxation is acceptable in this case.
Ivan Demidov of Moscow, Russia finished second and won $5,809,595. The United States and Russia also have a tax treaty and Mr. Demidov won't have any of his winnings withheld by the IRS. Russia has a 13% flat tax rate, so Mr. Demidov will owe about $755,247 to the State Taxation Service of Russia.
Posted by nemov at November 17, 2008 8:44 PM
Trackback Pings
TrackBack URL for this entry:
http://www.nemov.net/cgi/mt/mt-tb.cgi/2351
Comments
So? Taxation is based on public policy, those rates are set by the Danes themselves, who incidentally have an elected government.
As to the Russian tax system...Seriously? They are like Alaska without the annual checks to the people.
Besides, I like the Danes.
Posted by: BunE at November 18, 2008 11:10 AM
Evidently Eastgate moved over the summer to the UK and is trying to avoid the taxation. I bet he ends up getting taxed twice.
Posted by: nemov at November 18, 2008 12:10 PM