Sometimes I wonder if Donald Trump didn’t invent the typical American lottery system. After all American style lotteries inflate its actual lump sum to what you could win if you take the money over nearly three decades. Yesterday the Powerball lottery drawing had a jackpot of over 435 million dollars. (someone actually won on a single ticket) But the reality is that once you calculate the lump sum option and federal taxes, then you walk away with perhaps $182 million. Don’t forget about your state revenue wanting its cut which will reduce that sum.
I am not implying that I wouldn’t be appreciative to winning the lottery. However, I would at least like to win without having the additional taxes and not be paid over 30 years. Why can’t we have our lotteries like Great Britain, Canada or other nations that don’t tax its winners? Additionally, they pay in a lump sum. What is most helpful in those lotteries is that they have a cap on jackpot winnings. That means, for example, the UK Lottery cannot be above 170 million British pounds. So the additional contributions to its lottery scheme do not require bond investments as opposed to our lottery.
What I do like about internationally based lotteries is that they keep its winners anonymous. There are no published reports in the media about winners unless the winner wants to be identified. I like that idea because it allows recipients the option of not being identified by criminals or those that want to harass winners for loans or other financial gains. American lotteries in only a few select states have anonymous rules. Perhaps we should do the same to reduce liabilities to potential winners. After all, we tax the hell out of the winner and then plaster the name and address of where they live. It’s almost as if winning the lottery will not only change your life but become expensive to return to some normalcy of life and privacy.
There are mixed feelings about the lottery. Does it actually provide a tax revenue to certain state funded programs? Does the lottery constitute a double taxation because of purchase and winning standards? All in all, the lottery is a bunch of hype with outrageous jackpots only created to give it marketing appeal. Yes, there are winners and life changing moments for some. It does have an appreciation level. But the lottery should take a step back and become a bit more realistic with jackpots similar to European standards. The federal government should halt its exploitation of the lottery and create a tax-free zone for lottery winners. Lottery winners are the ones that make lavish purchases giving back to tax bases. Maybe we are tired of the lottery because despite playing, we are not winning. I think the lottery is losing its appeal. This is why we should reevaluate how the lottery contributes to our system.