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Pennsylvania lottery winners to be taxed for the first time

May 12, 2015, 10:55 am

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New Penn. Gov. Tom Wolf proposes historic tax increases

By Todd Northrop

Tucked into the depths of Pennsylvania Governor Tom Wolf's first budget plan is a proposal to tax lottery winnings over $600.

The newly-elected Democrat Governor's spokesman says that California and Pennsylvania are the only states with income taxes that exempt lottery proceeds. Some states have no income taxes, and those states also do not tax lottery winners.

"We have a massive budget deficit that we need to close," Sheridan said. "It's over two billion dollars, and doing something that every other state but two currently do seems like a no-brainer."

Wolf estimates it would generate $15 million dollars next year and build to $25 million within three years.

"That's $15-$20 million that we don't have to raise the personal income tax or sales tax," Murt said.

The new lottery-winner tax is part of Gov. Wolf's first budget plan since being elected, which includes the largest state tax increase in Pennsylvania history. His budget proposal of $33.6 billion represents a 16 percent increase over last year's budget.

This increase of the income tax rate would mean a $2.3 billion net increase for Pennsylvania's taxpayers.  According to his budget, the income tax rate will be raised by 20%, from 3.07% to 3.7%.

"I'm an anti-tax guy all the way around," said Representative Mike Regan (R-York). "I think we need to take other steps to reduce the size of government, look internally first before we look outward."

But Camilla Brown has a different thought. Camilla was playing the lottery at a self-serve machine in the Capitol cafeteria. She had a fistful of tickets, a pleasant smile and a generous outlook. She said if she could just win, she'd happily pay Pennsylvania.

"I think that's fair," Brown said. "If I win $75 million, I wouldn't mind paying 3-percent state taxes."

Lottery winnings are still subject to federal withholdings.

Casino winnings in Pennsylvania are also subject to state income taxes.

Prior to 1999, the state's General Fund was reimbursed by the Lottery Fund for its lost tax revenue on lottery winnings. That was halted by Act 4 of 1999-2000.

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51 comments. Last comment 7 years ago by dpoly1.
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lothob's avatar - chi jpeg.jpg

United States
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April 20, 2008
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Sorry Keystone club but it's time you join the rest of us lol. There's nothing constant in life except, taxes, death and hope!

"He who is not courageous enough to take risks will accomplish nothing in life."  Muhammad Ali

    haymaker's avatar - Lottery-012.jpg
    Egg Harbor twp.south Jersey shore
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    June 29, 2011
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    Jersey's the highest @ 10.8 %

    Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

      Raven62's avatar - binary
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      New Jersey
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      Governor Wolf: Cut Spending: Not Raise Taxes!

      A mind once stretched by a new idea never returns to its original dimensions!

      Catch-22: A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.

      Corruptissima re publica plurimae leges: When the republic is at its most corrupt the laws are most numerous.

      The best way to learn is to never stop being a student!

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        May 21, 2007
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        Sorry Keystone club but it's time you join the rest of us lol. There's nothing constant in life except, taxes, death and hope!

        LOL  you forgot a couple of constants, what about greed and ignorance Stooges

          Avatar

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          April 2, 2013
          1481 Posts
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          Imagine that.Thumbs Down

          Seek and ye shall find -Matt. 7:7 ...Ask and ye shall receive -John 16:24 ...Give and it shall be given unto you -Luke 6:38 ...Be careful what you ask for!!! -Mypiemaster 1:1

          Having Money Solves Problems That Not Having Money Creates Yes Nod ****John Carlton****

            Bondi Junction
            Australia
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            Wolf estimates it would generate $15 million dollars next year and build to $25 million within three years.

            "That's $15-$20 million that we don't have to raise the personal income tax or sales tax," Murt said.

             

             

            It is personal income tax for the person paying it!

            We all get a lot out of lotteries!

              Avatar
              Kentucky
              United States
              Member #32651
              February 14, 2006
              9610 Posts
              Offline

              New Penn. Gov. Tom Wolf proposes historic tax increases

              By Todd Northrop

              Tucked into the depths of Pennsylvania Governor Tom Wolf's first budget plan is a proposal to tax lottery winnings over $600.

              The newly-elected Democrat Governor's spokesman says that California and Pennsylvania are the only states with income taxes that exempt lottery proceeds. Some states have no income taxes, and those states also do not tax lottery winners.

              "We have a massive budget deficit that we need to close," Sheridan said. "It's over two billion dollars, and doing something that every other state but two currently do seems like a no-brainer."

              Wolf estimates it would generate $15 million dollars next year and build to $25 million within three years.

              "That's $15-$20 million that we don't have to raise the personal income tax or sales tax," Murt said.

              The new lottery-winner tax is part of Gov. Wolf's first budget plan since being elected, which includes the largest state tax increase in Pennsylvania history. His budget proposal of $33.6 billion represents a 16 percent increase over last year's budget.

              This increase of the income tax rate would mean a $2.3 billion net increase for Pennsylvania's taxpayers.  According to his budget, the income tax rate will be raised by 20%, from 3.07% to 3.7%.

              "I'm an anti-tax guy all the way around," said Representative Mike Regan (R-York). "I think we need to take other steps to reduce the size of government, look internally first before we look outward."

              But Camilla Brown has a different thought. Camilla was playing the lottery at a self-serve machine in the Capitol cafeteria. She had a fistful of tickets, a pleasant smile and a generous outlook. She said if she could just win, she'd happily pay Pennsylvania.

              "I think that's fair," Brown said. "If I win $75 million, I wouldn't mind paying 3-percent state taxes."

              Lottery winnings are still subject to federal withholdings.

              Casino winnings in Pennsylvania are also subject to state income taxes.

              Prior to 1999, the state's General Fund was reimbursed by the Lottery Fund for its lost tax revenue on lottery winnings. That was halted by Act 4 of 1999-2000.

              Wolf estimates it would generate $15 million dollars next year and build to $25 million within three years.

              PA's state tax is a flat rate 3.07% which means almost $489 million in prizes over $600 must be paid out to generate $15 million next year. It won't solve the state's monetary problems and will probably only make a dent.

                Avatar

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                July 6, 2011
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                "I think that's fair," Brown said. "If I win $75 million, I wouldn't mind paying 3-percent state taxes."

                 

                Brown may not mind, but im sure MOST of us DO MIND! Ignorance at its best. But is anyone surpised. 

                Why does government constantly think it's "ok" for "the people" to fork over cash on a consistent basis.

                Give government every single penny and you will have an even larger deficit, larger govt and ZERO liberty.

                Lottery players deserve 100% of their winnings. The State already makes a fortune off the sales... why on the Wins too????

                 

                ITS A NO BRAINER TO LEAVE LOTTERY WINNINGS ALONE. 100% of those winnings belong solely to the winner, not the govt.

                Get a clue govt... don't know if you noticed, but you ARE the problem. Stop making your irresponsible problems ours.

                Go look to those "lobbyists" who bought and paid for you and your "govt" to bail you out 

                 

                Again, read "Income Tax: Shattering the Myth's" by Dave Champion

                Then let me know if you still believe you know what the Income Tax actually is AFTER you finish reading the book

                 

                Here's some excerpts from the book itself:

                 

                Interpretations and Perceptions Chapter 3

                “America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” ~ Abraham Lincoln

                The first case to reach the U.S. Supreme Court regarding the effect of the 16th Amendment was Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916). After all these years, and despite a number of subsequent 16th Amendment decisions, Brushaber is still the seminal case. Brushaber provides a look at a number of constitutional aspects of U.S. tax law. I previously mentioned that the men who wrote the Constitution viewed Direct taxation as being limited to slaves and land – and therefore since the cardinal rule of constitutional interpretation is that the Constitution means what the men who wrote the words said it meant, then the government’s authority to impose a Direct tax is properly (constitutionally) limited to slaves and land. In Brushaber, Justice White, writing the decision of the Court (and who wrote the dissent in Pollock), reviews in brief the Pollock decision. During this review he summarizes Direct taxes in the following manner: “On the one hand, that the tax was not in the class of direct taxes requiring apportionment, because it was not levied directly on property because of its ownership, but rather on its use, and was therefore an excise, duty, or impost; and on the other, that in any event the class of The Income Tax: Shattering The Myths 25 26 Dave Champion direct taxes included only taxes directly levied on real estate because of its ownership.” [Underline added by author for emphasis] The Court then buttresses this observation with the following statement: “In the first place this is shown by the fact that wherever (and there were a number of cases of that kind) a tax was levied directly on real estate or slaves because of ownership, it was treated as coming within the direct class and apportionment was provided for, while no instance of apportionment as to any other kind of tax is afforded.” [Underline added by author for emphasis] The last line of the above quote should settle this debate once and for all in the minds of any rational, thinking person. Justice White is clearly saying the following: • The Constitution requires apportionment on any and all Direct taxes. • Taxes on real estate and slaves are Direct taxes. • In the history of U.S. taxation there was “no instance” in which a tax on any other form of property was apportioned. After almost two decades of research, it is my well-considered opinion that the U.S. government’s authority to impose a Direct tax is restricted to slaves and land. And I am not alone in this determination. The U.S. Supreme Court said as much in 1796 in Hylton. Then in Pollock (99 years after Hylton) the Court once again concludes that Congress’ Direct taxation power is limited to slaves and real estate. Eighteen years after Pollock, the Court reinforces this doctrine yet again by using Pollock’s explanation as the foundation from which to announce the Court’s position in Brushaber. Of course it should be noted that as of 1865 slavery became constitutionally impermissible, so after that date Congress’ authority to impose a Direct tax was limited to real estate. So what was the overarching purpose in the minds of the men who constructed the Constitution when they included the requirement of apportionment for Direct taxes? Again, Justice White, writing in Brushaber gives us the answer:

                ____________________________________

                There have been no changes in the federal government’s constitutional taxing powers since the creation of this nation. As the Court pointed out in Brushaber, the purpose of the 16th Amendment was to “harmonize” the government’s taxing powers, not change them. At this point, you have a superficial understanding of the tax scheme. I say “superficial” because there is more that has yet to be revealed. Nevertheless, if you stopped reading this book right now, you’d still know more about the federal government’s powers of taxation than 99% of the American public. You’d just be missing the most critical part! Before I reveal the hidden reality the government desperately does not want you to know about, let’s explore what the tax code looks like today. After all, if there have been no changes in the government’s taxing powers in more than 200 years, and only a “harmonizing” in 1913, we should be able to get a pretty clear picture of what tax has been imposed upon whom and for what activity. Let’s start at the beginning of the Tax Code with section 1(a). There is hereby imposed on the taxable income of — (1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and (2) every surviving spouse (as defined in section 2 (a)), If we resist the temptation to assume we know what that statement means and focus solely on the words Congress has chosen to use in this, the opening section of the Tax Code, how could we possibly know if that section is referring to us? I say that we should “resist the temptation to assume we know” because most Americans have been socialized to believe they “know” what the income tax is. The fact that by this point in the book you have almost certainly learned all manner of things about the income tax you never knew before should serve as a warning that presuming you “know” about the income tax is unwise. If you’re reading this book, I presume you’re looking for the truth about the income tax. If that is your goal, you’ll need to put aside all the things you think you know, and concentrate on what’s actually there – without any preconceived ideas based on years – or possibly decades – of (erroneous) socialization. Let’s look at the phrase “every married individual”. Does that refer to an American citizen who is married, or does is refer to a foreign person who is married and living in the U.S.? Based solely on the words Congress has chosen to use in the very first section of the Code, can you say which is true? No. Further, is it married people living in the U.S. or Americans who are married but living outside the U.S.? (You may not find that question so odd as we continue.) Based solely on the words Congress has chosen to use in the very first section of the Code, can you say which is true? No. And note that the statute says you are taxed on “taxable income”. Based solely on the words used in this statute, can you tell me what specific type of income that is or who might be earning that specific type of income? No. Clearly, Congress didn’t mean all income or the statute would say that. Accordingly, we know that the tax being imposed is only upon a particular species of income known as “taxable income”. (We’ll get into that in a little bit.) It should be obvious that the statute doesn’t tell us all that we might want to know – or all that we must know – in order to make an informed decision about whether or not the tax in question has been imposed on us. I’ve often referred to the Regulations as that which “puts the meat on the bone”. Since the statute in this instance is clearly a bone with no meat on it, let’s have a look at the corresponding regulation.

                group changes nothing. Instead of one vile criminal, you simply have a group, a collective, of vile criminals. By contrast, those who believe in personal liberty want nothing from others – except that others do not infringe upon their rights, just as they will not infringe upon the rights of others. They want to live life within the dictates of their own conscience, restrained only by their obligation not to interfere with the equal rights of others. Because you – the lover of liberty – are so selfish and shortsighted, you cannot be told the truth. If you were told the truth, you’d rebel against it. If you were told the truth, you would not permit your property/wealth to be seized for no better reason than to let some other guy do with it what he thinks is right. Accordingly, you cannot be told the truth. The truth must be hidden from you because you are too stupid to reason things through for yourself. When your property is stolen from you under the guise of law, a crime is being committed against you, but these same people have made the subject so vast and complex that you cannot discover their crime. In your bones you know something is wrong, but you can’t quite get your mind around it. That is exactly the way they want it - and that is exactly what you and I are going to end, right now! In the last chapter I laid out for you whom the income tax is actually imposed upon. Many of you are uncertain; some of you are flabbergasted. That’s OK; I understand. It’s a lot to process as you simply read through the book. I’m sure many of you will read this book 2 or 3 times to make sure you understand it thoroughly. That’s a good idea. Others will ponder the contents of this book for weeks or even months, mentally sorting through the details until your mind comes to the place it needs to be. In the final analysis, what I have to say doesn’t matter. What matters is where you end up. If all this book contained were Dave Champion’s claims, you’d have wasted your money buying it. What makes it worthwhile is if you learn what the government has to say about the income tax! What the government has to say about subtitle ‘A’ comes from numerous sources. Some are found in statutes, some in the regulations, some in Treasury Decisions, some in Executive Orders, some in the Internal Revenue Manual, etc., but no matter what the source, all the items form a cohesive and consistent whole,

                in which subtitle ‘A’ is imposed upon foreign persons with U.S. source income, but with certain specific Americans being “made liable” for the filing of returns and for paying the tax imposed upon the foreign person. In a later chapter I will address Tax Honesty arguments that are incorrect. I bring it up here because at this juncture, some people may mistakenly believe that I am putting forth the “861 position”; also know as the “gross income” position. I am not. While there may be some superficial resemblance between the “861 position” and what the law actually says, they are not even remotely the same. This will be explained in more detail later. When I said that this book has been worthwhile if you learn “what the government has to say about the income tax”, that should not be taken to mean “the government’s public position on the income tax”. The government’s public position is to use a combination of vague wording and legalistic jargon to give the American public the impression that everyone owes income tax! What I’m going to show you here is what the government has said that it doesn’t want you to see, or figure out. Some of the items I will show you were written in the 1980s – long before the IRS imagined that it would be required by law to post such documents to its website. Faced with doing so, Treasury convinced Congress to pass laws that “obsoleted” many of the documents. Once a document has been declared “obsolete” it is no longer necessary for the IRS to post the document to its website and it is no longer available through the Freedom of Information Act. The government’s goal was that those <snip>ing documents would never see the light of day. As you are about to discover, their desire to keep the information hidden from you – the American public – didn’t work out so well! As you review these documents, you will also discover that over the last 5-10 years the IRS has pretty much abandoned the law and now hopes that plain old-fashioned fear will keep “the marks” [that’s YOU!] in line. Tax law is, in its nature, a very specific thing. The very nature of taxation requires that the statutes, regulations, and other supporting documents detail with substantial specificity whom the tax is imposed upon and under what circumstances. That is not true of income tax alone, but of all taxation. As the public became more dubious of the government’s party-line concerning the income tax, and Tax Honesty researchers began organizing on a more efficient "Employee" – Who, Me? 165 People it exists to serve. And it certainly would not be targeting the American people as the victims of the largest financial crime in the history of the world! While I want nothing more than a government which serves and respects The People, that’s not remotely what we have. A good friend of mine coined the adage; “The government lies and lies all the time. It even lies when the truth would serve it well.” After nearly two decades of dealing with the government’s claims of power and authority in all manner of subjects, my experience has been that his adage is remarkably accurate. For many of you, this book will be a life-altering epiphany. For others, it will merely open the door to understanding how the government really operates, and your epiphany will occur sometime down the road. A small minority will (for emotional reasons) reject everything they read in this book and bury their heads in the sand. But try as they might, they cannot un-learn what they’ve learned. All they can do is run from it. This “genie” cannot be stuffed back into its bottle! Some readers will be able to learn the truth and ignore it. They will be able to go along as if nothing has changed in their universe. I believe the word that best describes these people is “sheep”. Regrettably, in this country we have far too many “sheep” masquerading as Americans. Other readers, imbued with character, integrity, honor, and love of liberty, are, in my opinion, the true Americans! Unlike the “sheep”, these will not be able to stand by as our servants steal our wealth and commit violent acts against their masters [us!] in this house we call “America”. It is these men and women – citizens of courage, with a love of liberty – for whom I write this book! It is they who will put this nation back on track! What has come in the preceding chapters should have demonstrated to you that the government is not telling you the truth about subtitle ‘A’. Unfortunately, that’s not the end of their lies in this area. Subtitle ‘C’ is entitled “Employment Taxes”. The regulations for subtitle ‘C’ are contained in Part 31 of the CFR and they are entitled, “Employment Taxes and Collection of Income Tax at Source”. (Didn’t I tell you we’d be seeing the phrase “Collection of Income Tax at Source” again?) 166 Dave Champion Under the (presumed) provisions of subtitle ‘C’, the average American endures something commonly referred to as “payroll withholding”. Yet the law requires nothing of the sort! When it comes to average American working men and women, Congress has never passed any law that permits anyone to take anything out of their paychecks. Let me begin by telling you a true story that illustrates how little people know about this subject. And sadly, those who are supposed to know, don’t. A few years back, during a telephone conference call with the woman who had been in charge of payroll for a medium-size business for 13 years, she kept saying that she had to perform payroll withholding because, “It’s the law”. She said that 4 or 5 times during the first few minutes, and her tone was quite adamant. Since she was so adamant that it was “required by law”, I asked her to give me the citation of the law so we could look at it together. “Give you the citation?”, she responded. “I don’t know the citation.” I told her it was OK that she didn’t know the citation and instead asked her to quote a bit of the law to me. I explained that I had been doing this for many years and if she could quote just a small portion of the law I was confident that I would be able to recognize it and I’d know the citation. “Quote it to you?” she replied. “I can’t quote it.” Hmmm. She was insistent that what she was doing was “required by law”, yet she did not know where the law was, nor anything that it said. How odd. Always trying to be helpful, I assured her that after all the years I’d been involved in these matters, I knew where “it” was and we could look at it together on the Internet. When we finished reading the relevant statute, I asked her if there was any way, even if she twisted, bent, or mangled Congress’ words, that she could figure out how to apply it to “Tom”, the gentleman who’d instructed her to stop withholding from his paycheck. There was a pregnant pause, and then she said: “I don’t want to talk to you about the law anymore.”

                This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

                  RedStang's avatar - laughing chimp.gif
                  NY
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                  January 21, 2012
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                  Governor Wolf: Cut Spending: Not Raise Taxes!

                  +1 on that. You have to see the stuff we get from State auctions for penny's on the dollar that they spend thousands on and hardly use.

                    TheGameGrl's avatar - Lottery-012.jpg
                    A long and winding road
                    United States
                    Member #17083
                    June 10, 2005
                    6639 Posts
                    Online

                    They are across the board raising state sales tax. Stop digging into my pockets! So fed up with Govt taking things at liberty.

                    How can we as state citizens protest this tax? We do have a say I hope? 

                    I'm taxed if I make a profit, I am taxed if I buy gas, I am taxed to death...(yup even upon death you are taxed, go figure LOL!)

                    Count your smiles.


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                      That's all dumbocrats know tax tax tax and sex sex sex.

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                        They increase lottery tickets prices and people still play.

                        They increase the balls to choose from and people still play.

                        They raise taxes on lottery winnings and people still play.

                        It seems that lottery players are a resource that must be exploited. 

                        Puke

                        That money's gone fo ever

                          itpmguru's avatar - 42a4d4d8f2a4312fb8e253dd8f6ef251
                          No Man's Land
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                          February 19, 2015
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                          "We have a massive budget deficit that we need to close," Sheridan said. "It's over two billion dollars, and doing something that every other state but two currently do seems like a no-brainer."

                          Wolf estimates it would generate $15 million dollars next year and build to $25 million within three years."

                          Rant

                          Someone needs to teach him some basic math.  Such as, 15mil does not = 2bil in one year Thumbs Up

                          Just another tax on the poor that think they have a snowball's chance in H&#L if winning!

                          Here's an idea Gov. Co. Inc. REDUCE YOUR STAFF!  Half of them probably sit and play Tetris all day on a PC that "We the people" paid for!

                          Time to take the blank checks out of their hands.....period!

                          Read up on the scam that is NCEL:   Not Live Drawings!


                                                               


                            mikeintexas's avatar - h87TsB4
                            Texas Panhandle
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                            December 20, 2012
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                            They are across the board raising state sales tax. Stop digging into my pockets! So fed up with Govt taking things at liberty.

                            How can we as state citizens protest this tax? We do have a say I hope? 

                            I'm taxed if I make a profit, I am taxed if I buy gas, I am taxed to death...(yup even upon death you are taxed, go figure LOL!)

                            I feel your pain. Wink

                            Contact Your Senator

                            Contact Your Representative

                            One suggestion: if you really do want to complain about this bill, a hand-written letter is the best (if legible - if not, typed - I would need to type), a phone call is next best and an email brings up the rear in how much consideration your opinion will be given. (according to what I've read and a face-to-face conversation with my own state congressman about how best to get your legislator's attention) Personally, I would do all three and convince your friends and family there in PA to do the same.