There has been a lot of hype regarding the intention of the Irish government to increase the one percent tax on all gambling. This tax proposition was intended to help the under-funded horse and hound racing industries of the country, which seem to be on their last legs, so to speak. Government officials and legal specialists have proposed that the gambling tax be upgraded to two percent, as opposed to the old one percent tax. However, while animal rights groups are applauding this project, the betting associations have protested vehemently against it. If you take a closer look to this tax increase, you will notice that the truth is somewhere in the middle, as both parties have a pretty strong case.

Simon Coveney, Minister of Agriculture, is one of the supporters of the tax increase proposed by McCarthy. In his opinion, the tax increase is a very viable solution for revitalizing the horse and hound industry of Ireland, considering the income will be allocated for this purpose. Moreover, Coveney has proposed increasing the taxes imposed to the online betting and gambling agencies. However, the online and offline betting agencies in Ireland are very few, due to the legislation of the country. The Irish citizens prefer betting at online agencies located in other states, as it implies less hassle and smaller risks of having to pay fines.

However, both Coveney and McCarthy are aware that the betting agencies have strong objections regarding the tax hike. While the supporters of the proposition consider the one percent betting tax as too low, the bookmakers seem to think otherwise. The general opinions regarding casinos and other similar betting agencies are that the profits are through the roof. However, this is not entirely true in Ireland, as the laws regarding gambling are rather harsh and few agencies are able to earn an above average profit. Therefore, there are several casinos struggling to stay in business that would be severely impacted by the tax increase.

Moreover, while the recent trend of increasing the tax rate in order to revitalize the economy seems to be growing in popularity, financial analysts warn that the beneficial effects are merely temporary. Additionally, it seems that this solution has negative consequences in the long run. As an immediate result of the tax increase, the casinos on the threshold of bankruptcy will be forced to do massive layoffs in order to survive, thus the unemployment rate will raise. Therefore, while the situation of the horse and hound industry will be ameliorated for the moment, several agencies in the gambling sector will receive a deathblow.

In addition, the people that have been laid off and bankrupt institutions will no longer be able to pay their taxes, thus lowering the overall tax revenue. In essence, the effects of the law will be exactly the opposite of what the officials were expecting on long term. However, the fact still stands: the racing industry needs substantially more funding, in order to survive. The only issue is finding a source of funding that will not cripple another part of the economy.

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