I think it's quite telling (and depressing) that the vast majority of the comments on this are "taxes are bad" and "wow, they took away that much money?" instead of "he now has enough money to live three lifetimes in luxury and still have millions left over, he's set for life and more".
Our societies are obsessed with having as much as possible, instead of with having as much as needed, which are two very different concepts. Economists have a concept of a utility curve; most people, it seems, ignore that concept.
In Canada, the Canada Revenue Agency considers gambling winnings to be windfalls that are not subject tax, so any winners receive the full value of the advertised prizes [0].
[0]
A possible reason as to why this is also the case is that most/all of the lotteries are run by the provinces themselves, so you could think of them removing the taxable amount continuously in an accumulative fashion as the total pot grows and then only advertising what the winner would take home.
Right - the $1.28B is a figment. Really the number is like $750M for lump sum. Getting $433M after a $750M windfall seems reasonable with what I know about tax rates.
Gambling in general is a loser's game, but the games people TYPICALLY play in gambling isn't generational wealth.
What makes the lottery slightly different is "YOLO": yeah on average it is not a good play, but someone presumably wins, and for their one shot in life it gets transformed with generational wealth.
That is: go big or go home.
... well, except that most lottery winners lose it all, but that's a different issue.
To emphasize, I'm not advocating playing the lottery, just that odds don't really account for the biological reality of only getting one life to live.
Some quick back of the envelope calculations suggests that powerball becomes positive estimated value at about 650mil for jackpot or above (though if we want to discount for taxes, lump sum etc, high than that) but obviously that EV is massively weighted towards one very very very rare event
National lotteries worldwide are really nothing but a punitive scam to tax the poor by selling them on an illusionary idea of a shortcut to their materialistic dreams. Also I bought $60 worth of Megamillions tickets for the draw.
I want to be pedantic about this, because words matter.
No one is forcing anyone to buy a lottery ticket.
No one's being threatened with jail time if they don't buy a lottery ticket.
No one's being dragged into a legal process where they are presumed guilty until proven innocent if they don't buy a lottery ticket.
There are not tens of thousands of enforcers out there looking for people who didn't buy their lottery ticket.
There are no hotlines to anonymously report those who didn't buy a lottery ticket.
Politicians do not regularly buy voter approval by messing around at the margins with lottery ticket payouts.
There is no organized industry - hundreds of thousands of people - lobbying Congress to keep the purchase of lottery tickets as complicated as possible so they can keep their jobs.
You may not like the lottery. You may never play the lottery. But don't mistake it for a tax. That makes it too easy to forget the sheer tonnage of force, coercion and political strongarming a real tax involves.
People regularly call gambling and especially the lottery a tax on the stupid because the odds are so bad it’s like paying a tax for being stupid enough to play. It’s just a saying people have, you don’t have to be pedantic, it’s not literal.
The OPs point is that it’s gross the government participates in taking money from people through the lottery, many of whom likely have a gambling addiction.
I would bet the payout and the odds would be better...
What is organized crime but another alternate government(small g government), no no wait, hear me out. You pay them and they make sure your business operates without trouble, exactly the same set of services the government offers, organized crime is illegal because the government(big G government) hates the competition.
Joking aside, organized crime sucks for the same reason that all dictatorships suck.
The other point to note, where private owned gambling exist(nevada etc) it regulates(self and government oversight) to make about the same profit margin as the insurance industry. The margin on the lottery is unethical.
433.7M dollars is still pretty good. Depending on age, it might also be the smart way to do it. A guy in his 20s winning the lottery and a guy in his mid 60s is two very different use cases for money.
Since I learned of them in my childhood, it always seemed obvious that lotteries are a government-approved scam, but I never imagined they were a scam on so many levels.
Rare for a scam to lay out the odds pretty readily for you. Governments run lotteries exactly because you can trust them. Bob pulling numbers out of a hat for his local lottery will probably be tempted to cheat.
And then they front-load all of the impossibly, stupidly, comedically overoptimistic numbers in the marketing (eg. pre-tax winnings), and have a fine print from which you can barely determine the odds of success (and if you're capable of that you most likely aren't participating either way), and then the whole game is designed so that you feel like you have some sort of superstitious influence over whether you win...
Please, let's not pretend this isn't about extracting money from people who are poor at decision-making.
Readit News
Our societies are obsessed with having as much as possible, instead of with having as much as needed, which are two very different concepts. Economists have a concept of a utility curve; most people, it seems, ignore that concept.
In Canada, the Canada Revenue Agency considers gambling winnings to be windfalls that are not subject tax, so any winners receive the full value of the advertised prizes [0]. [0]
https://www.canada.ca/en/revenue-agency/services/tax/technic...
A possible reason as to why this is also the case is that most/all of the lotteries are run by the provinces themselves, so you could think of them removing the taxable amount continuously in an accumulative fashion as the total pot grows and then only advertising what the winner would take home.
That the government can tax their own money they give away is disgusting
What makes the lottery slightly different is "YOLO": yeah on average it is not a good play, but someone presumably wins, and for their one shot in life it gets transformed with generational wealth.
That is: go big or go home.
... well, except that most lottery winners lose it all, but that's a different issue.
To emphasize, I'm not advocating playing the lottery, just that odds don't really account for the biological reality of only getting one life to live.
I also have a problem with government employees (who, by definition, are paid with tax dollars) being taxed on their pay
It's beyond ridiculous!
And in fact it is illegal for anyone other than the government to run a lottery.
in a sarcastic tone I like the lottery, it is a tax on the stupid.
No one is forcing anyone to buy a lottery ticket.
No one's being threatened with jail time if they don't buy a lottery ticket.
No one's being dragged into a legal process where they are presumed guilty until proven innocent if they don't buy a lottery ticket.
There are not tens of thousands of enforcers out there looking for people who didn't buy their lottery ticket.
There are no hotlines to anonymously report those who didn't buy a lottery ticket.
Politicians do not regularly buy voter approval by messing around at the margins with lottery ticket payouts.
There is no organized industry - hundreds of thousands of people - lobbying Congress to keep the purchase of lottery tickets as complicated as possible so they can keep their jobs.
You may not like the lottery. You may never play the lottery. But don't mistake it for a tax. That makes it too easy to forget the sheer tonnage of force, coercion and political strongarming a real tax involves.
The OPs point is that it’s gross the government participates in taking money from people through the lottery, many of whom likely have a gambling addiction.
What is organized crime but another alternate government(small g government), no no wait, hear me out. You pay them and they make sure your business operates without trouble, exactly the same set of services the government offers, organized crime is illegal because the government(big G government) hates the competition.
Joking aside, organized crime sucks for the same reason that all dictatorships suck.
The other point to note, where private owned gambling exist(nevada etc) it regulates(self and government oversight) to make about the same profit margin as the insurance industry. The margin on the lottery is unethical.
Please, let's not pretend this isn't about extracting money from people who are poor at decision-making.