The Lottery

[Rollo Tamasi]

The part that really emphasizes our greed is the longer a lottery continues without a winner, the larger the prize becomes and the more tickets are sold. One's odds of winning haven't changed a bit but with the bigger prize people are willing to spend more to have that shot.

Here's the kicker. Most of the larger lotteries begin with a substantial prize in the millions so why is winning even more such a high draw? For example, the Powerball lottery starts out at $40,000,000.00. Even after taxes, the remaining monies would be more than enough for the winner to be financially independent and then some. What difference does it make if the winning prize goes even higher?

A person winning a $40,000,000.00 prize could retire immediately at any age, never use the base amount of their funds, and still confidently have approximately $1,200,000.00 per year salary. Check it out.

The highest federal tax bracket is 39.6%. The highest MN tax bracket is 9.85%. Not accurate but assuming the final taxable income for that winning year is the $40M, the total tax liability would be approximately 49.45% leaving the winner with approximately $20,220,000.00. Even at the least conservative estimate, it should not be much of a problem to invest that money and get an average return of over 6% annually. I would expect 8% to be attainable with reasonably minimal risk.

$20,220,000.00 x .06 = $1,213,200.00 annual return on the investment. Here in MN, a middle class income is considered to be $60,000.00 - $70,000.00 per year. Using the $70,000.00 figure, the $1,213,200.00 is enough to supply 17 middle income salaries.

How much more does one need??

Of course, this is all assuming the winner doesn't spend about half of the money defending against the flood of frivolous lawsuits aimed to get their piece of the pie.

I need more.
That's my human nature.

 

[Corn Pop]

I need less.

 

[jasonc]

funding govt on vices isn't very wise.

 

[Corn Pop]

funding govt on vices isn't very wise.

Why is that?. Whos funding?

 

[jasonc]

Why is that?. Whos funding?

because it cause problems. look at the indirect problems that govt has to pay for.
divorce with kids, child support collections if unpaid and the other needs money , qualifies for tanf. in this case the mother would have the property and money but the father may have to pay.

in the case of lottery players those often on tanf will play and the lotto which funds schools is a type of tax.

 

[Corn Pop]

I think the govt gets every dollar anyhow because basically every item and transaction is taxed from income tax. So a dollar keeps getting taxed till there is nothing left to tax.

 

[jasonc]

I think the govt gets every dollar anyhow because basically every item and transaction is taxed.

lotto isn't taxed, they are the ones who sell it to you, the agent who sells the tickets get 8 percent of the ticket price. the agent pays the small amounts but the limit for that I think is probably 10 grand and is reimbursed. im not sure. I know a lady who had 2 kids, she got ss for them and also herself as she could work part time and blow 800 a month of lotto tickets and would spend the money she won in days, 5 grand or even 10 grand gone like that.

 

[ezra]

I usually play every week, but never win, but at least here in PA a small part of the proceeds go to help the elderly so at least my money is not going to waste.

Mo voted lottery in the proceeds will go to the schools .. where our schools are lacking and what schools are building new are with tax dollars ..i dont play or buy got better things to do

 

[Corn Pop]

The system works like Texas hold em. People can play as many hands between each other as they like winners and losers, but each hand played the house takes a % of the pot. Why people are playing the table is slowly going broke. House doesn't distibute its takings back between the players, it buys more tables.

 

[jasonc]

The system works like Texas hold em. People can play as many hands between each other as they like, but each hand played the house takes a %. Why people are playing each other the table is slowly going broke.

the lotto is funded from a pot that each ticket builds up. until its dispensed out there is money in the bank gaining interest and the interest is what pays the things out. the govt at times has claimed a winner and not have the money to give. you can elect a lump sum pay out or pay out over a set time(less taxes taken out of your winnings).

the state of Illinois was in such a state, the problem is that the tickets are also robbed to pay peter and paul, paul then is robbed to pay the winner. Illinois got caught. sounds like the govt to do that.

 

[Corn Pop]

Thats sounds majorly crooked. Then again we are talking about human systems.