380 million dollars.
I’ve never met anyone with 380 million dollars. In fact, most of us never will.
Interest rates are low so the “annuitized” cash value was $240 Million. A ticket sold in Idaho and in Washington both won the jackpot and will split the prize. If they take the cash (the smart choice), each receives $120 million.
Or not.
The IRS requires a minimum 25% withholding on gambling wins in excess of $5000. Except the real rate is 35% on the income over $372,950 plus $108,216. And state and local taxes grab another chunk (although the Washington state winner lives in a state with no income tax).
So our 380 million dollar winner is actually two 190 million dollar winners who each get half of 240 million dollars and take home less than 80 million.
That’s still a lot of money and nothing to be peeved about.
Except it turns out corporate dividends are not the only kind of income twice taxed or triple or even quintuple taxed. Every dollar that went into that jackpot was already “after tax” income. Taxpayers (even the very poor who have no tax liability) bought every one of the 300-ish million tickets sold.
So the governments got income tax on the money coming in, then they took a cut off the top of the lottery prize (for the education fund, doncha know). And now they take another tax on the “winnings.”
A tax on peope who can’t do math.
That’s a lot of money and it is something to be peeved about.
Dick, I have never looked at it that way, and yeah, it does peeve me a little. If I were one a them tub-thumpin’ types, I’d say, “I’m never buyin’ another goldurn lottery ticket, until the next time it goes over 100 million!” and hope that someday I’d get to roll around on a big bed in a pile of 80 million bucks, laughing hysterically and saying “Mine! All Mine!” For some reason, in this fantasy, I look like Sharon Stone at the beginning of “Casino,” right down to the white mink coat and long blonde fall.
Yeah, it’s annoying, but no one HAS to play. I find it more annoying that the gobblement wastes billions and California takes our tax money for the university system, gives away more and more spots to out of state/country students instead of Cali kids to make more and more money for the outrageous fucking pensions. But of course I could move…
An income tax on income tax returns is double taxation (once actually proposed IIRC). But if I take my after-tax earnings and pay the yard man and he pays income tax on that, which is analogous to your scenario, that’s not double taxation. That’s just the gobblement taking its income tax share all the way down the trickle pipe. Either that or it’s past my bedtime and I’m a peope who can’t do math.
I can do enough math to know if I won dollars in the millions, I would embarrass myself. Or my kids anyway.
Any time money changes hands, they tax it, as a rule. We could get around that for a short time by exchanging services and livestock in a barter system, but the govt would eventually go, Wait. What? and figure put how to take a piece a that.
What bugs me isn’t the taxing on income gained for no work, but rather the hyped advert for the Lottery to entice otoole into it by overstating it. They are not going to win the prize advertised. Ever. False advertising like that by you or me would get us sanctioned, but the lottery commissions are graced by the gods to bilk the public.
I understand the rationale behind taxing money over and over again; it lets the government hide how much tax We the Overtaxed People actually pay.
If Congress truly wanted to make the cost of gobblement (thanks, Don) transparent, there would be one and only one tax: a flat rate tax on individual earned income.
As Herr blogmeister pointed out, those who bought the lottery ticket(s) that went to build up the jackpot, did it with alleged after tax money — because as he also hinted, most of the ticket purchasers are traditionally individuals whose income status does not require that they pay income tax to start with. So, from my POV this is a very good way for the poor to pay their fair share of taxes. BTW, their chances of winning were virtually the same whether they had bought a ticket or not.
One of the things that liberals and moderates do not understand is the rollover taxation principle where each dollar that is flipped in commerce is subject to being taxed. Therefore they are at a loss to understand how lowering taxes to create business opportunities for hiring more people is a revenue-enhancing process.
To me, that is a no-brainer; but since Mrs Poleczech claims I have no brain to start with, it is easier for me.
— George