Lottery Taxation

Reply #41

Chewie — Tue, 16 Aug 2005 13:41:08 GMT

An interesting article on (federal) taxes against the lottery winnings is found here:http://www.williamsmullen.com/news/articles_detail/019.htmThere are many great issues discussed. Think of it as part of your preparation work. When you win, you will be too excited to think about it then.

Reply #40

orangeman — Tue, 16 Aug 2005 04:00:02 GMT

There is no state income tax in Texas, therefore no state tax on lottery winnings.Orangeman

Reply #39

dvdiva — Tue, 16 Aug 2005 03:55:56 GMT

Life insurance is primarily taken to pay for burial, cover medical expenses and provide something to survivors. There is no 55% rate for federal death tax any more and the current rate being descussed for happening after 2010 is 15%.As far as reducing or eleminating taxes on state lotteries I agree it's very unlikely but states need an added bonus akin to the tax-free muni bonds for their state lotteries. Sales in state lotteries has dropped especially for jackpot style games while sales have so... [ More ]

Reply #38

Rip Snorter — Tue, 16 Aug 2005 00:11:40 GMT

So there's no State tax on lottery winnings in Texas, other than the usual sales and property taxes everyone pays?Wonder if that's also true in WA State. I think they don't have a State income tax.Jack

Reply #37

Badger — Tue, 16 Aug 2005 00:07:01 GMT

Yeah it's crummy. But that's our wonderful politicians at work. WHen you think about it, all the money that is bet to buy the tickets is money that was already taxed when earned. Supposedly that is money that makes up the jackpots. So it's taxed again.Why do the pols tax us? Because they can.

Reply #36

orangeman — Mon, 15 Aug 2005 15:14:05 GMT

Texas has no state income tax but Austin makes it up with property and sales taxes that are through the roof. The state and local governments get it somehow. It either comes out of one pocket or the other.Orangeman

Reply #35

Todd — Mon, 15 Aug 2005 15:02:34 GMT

This thread certainly has taken a life of its own, but I'll try to add my simple comments, as they relate to the original post.I think the federal government has a right to tax lottery winnings, just as they have a right to tax any other form of income.Would I want to get my jackpot prize without any taxes taken out? Of course! Just like I wish that the government did not tax my regular income!The reality is that with our system of government, taxes are required in order to do things like fund... [ More ]

Reply #34

konane — Mon, 15 Aug 2005 14:49:54 GMT

It's been my understanding that gambling/lottery winnings are taxed as ordinary income and fica is not deducted.Do not believe windfall designation applies but sure welcome input from anyone who can clarify.Found this on a quick search: Tax Trails - Miscellaneous / Other Income You must include your gambling winnings as income.If you itemize your deductions on Form 1040, Schedule A, you may deduct gambling losses you had UP TO the amount of your winnings.http://www.irs.gov/individuals/article/0... [ More ]

Reply #33

lchoro — Mon, 15 Aug 2005 14:30:33 GMT

I really don't see where you get off on this poor people routine. Poor people spend more money on toilet paper and beer also relative to rich people. So what. The difference is that the rich executive has an annual income not a windfall. Winning a lottery is hardly an average event in someone's live. Income from several sources including dividents, tax-free muni bonds and life insurance payouts are tax free. State lotteries should also be there since most of the money raised by such lotteries go... [ More ]

Reply #32

dvdiva — Mon, 15 Aug 2005 04:43:01 GMT

So what? Who cares that the poor play the lottery I'm well below the median for Seattle and I play (although rarely since the prizes have been so low). Taxing the winnings is poor judgement for sales. Since state games exist for the benefit of the state and to add to the tax coffers they need an added bonus to compete against indian and online gambling offerings.I really don't see where you get off on this poor people routine. Poor people spend more money on toilet paper and beer also relative t... [ More ]

Reply #31

pacattack05 — Mon, 15 Aug 2005 03:47:25 GMT

Yeah!!! Something like that

Reply #30

Rip Snorter — Mon, 15 Aug 2005 03:01:16 GMT

I believe the quote is, 'Oh the tangled webs we weave when first we practice to deceive'.In this instance we're deceiving no one but ourselves, and God din't have a lot to do with our getting into the position we're in. Likely as not, if we want to get out of it we'll have to drag ourselves out by our own strength.Jack

Reply #29

pacattack05 — Mon, 15 Aug 2005 02:36:03 GMT

The tangled web in which we weave. God help us all

Reply #28

Rip Snorter — Mon, 15 Aug 2005 02:29:25 GMT

I see a lot of people on these threads singing the virtues of all the educational benefits accruing to educational systems from lottery contributions.Think about it. An education has always been available in this country for people who wanted it badly enough, even in the most difficult times and circumstances.Who, precisely, are all these people who are getting the benefits of that funding?What's wrong with parents taking responisibility for the cost of educating their own children?Where's the... [ More ]

Reply #27

Rip Snorter — Mon, 15 Aug 2005 02:10:30 GMT

The real question is this:Which US Government functions are the American public willing to demand be given up to curtail the spending of all that money? The fleet of new government automobiles every year? A drop in the bucket. Say, 50-75 percent of military spending? Gotta start minding our own business if we want to quit having an interminable series of wars shooting off weaponry it takes a hundred average taxpayers a year of taxes to buy one of. But that's not anywhere nearly enough to even... [ More ]

Reply #26

Rip Snorter — Mon, 15 Aug 2005 01:55:53 GMT

Sounds as though you've about summed it up.Not bad for an English major. Good job.Jack

Reply #25

pacattack05 — Mon, 15 Aug 2005 01:22:01 GMT

You're preaching to the choir brotha.....

Reply #24

konane — Mon, 15 Aug 2005 01:20:50 GMT

Our Senators, Representatives, President and Vice President all have email addresses ... you don't have to go to Washington, call Washington long distance or spend the cost of a stamp to let your opinion be known.

Reply #23

orangeman — Mon, 15 Aug 2005 01:19:31 GMT

I have a theory about taxes and it goes like this. The government basically gets ALL of our money as it moves through the economy. It goes like this: Mr. A pays a tax when he deals with Mr. B. Mr. B pays a tax when he deals with Mr. C and on down the row. The only element of difference is the rate of taxation. The 10% rate moves the tax down the line slower than a 25% rate. The end result is the same. The government gets all of our money at the end of the day. In other words, $1.00 becom... [ More ]

Reply #22

four4me — Mon, 15 Aug 2005 01:07:49 GMT

American people as a whole have a hard enough time getting the janitor to clean the bathroom let alone get the government to listen to and act on their wishes. The last time a large contingent protested at the white house was when the truckers on Feb 22, 2000 protested the rising gas prices. Less than three days later they went whimpering home with their tails between their legs.

Reply #21

Rip Snorter — Mon, 15 Aug 2005 00:51:37 GMT

You just grab that AK and run right on ahead, jporter. I might join you if things look good after the first volley or maybe sometime later. Don't wait up.Meanwhile, do some convincing of your own. I can't get real excited about convincing anyone about anything. I'm too stupid, and they're mostly too stupid to know what they need convincing of.Jack

Reply #20

jporter — Mon, 15 Aug 2005 00:28:35 GMT

Holly Christ this group sounds Libertarian. Now if I could just convince all of you to influence just one more person to your wayof thinking, remembering we are the government (wethe people?) and if both of you will take up the AK-47 I will buyyou, with amunition, we will convince the robbers in Washingtonthat they are not the power of these United States. Thomas Paine in his Common Sense influenced the early fathersto rise up against the King of England when they hadquestionable thoughts a... [ More ]

Reply #19

pacattack05 — Sun, 14 Aug 2005 23:44:46 GMT

Does that mean that I'll have to start paying taxes? Especially on Lotteries. Go figure

Reply #18

four4me — Sun, 14 Aug 2005 23:38:31 GMT

Arnold Schwarzenegger said it as plain and as clear as one could say it on 60 minutes. Quote: (for every dollar we take in the legislation spends $1.10) Un-quote. Now that's progress for you, taxation with representation.

Reply #17

Bradly_60 — Sun, 14 Aug 2005 23:23:21 GMT

This is a very fun topic to debate. Our current tax system is pathetic. My family has always been considered a low income family. (single mom three kids) What I don't understand is how in the heck my mom has always gotten more money back then see has ever paid in in a tax year. The rich pay almost a third of their income to taxes just to give the poor money they should not get. I can see the lower income people not paying any taxes getting all the money back that they pay in. But more tha... [ More ]

Reply #16

lchoro — Sun, 14 Aug 2005 23:00:17 GMT

Here are my problems with the Fair Tax':1. The actual tax rate is much higher than that advertised by the author of the plan. He claims that only a 23 percent consumption tax rate on retail sales, exclusive of food and medical products, is needed to produce the same amount of revenue as the current tax code. First of all, the tax rate is actually 30 percent since for every 77 cents of a good or service that is purchased, another 23 cents is added on in the form of this national sales tax. I can... [ More ]

Reply #15

pacattack05 — Sun, 14 Aug 2005 22:52:09 GMT

You know? I never thought of that. I'm totally against the fair tax. I want to send Neal Boortz what you wrote. Then maybe he can climb down from his lofty la-la land ideas and see how an LP member can tell the truth about greed within the govt.Kudos to people like you out there. No matter how prestigious a person is, as like an AM radio station talk show host, They will always be so caught up in their delusions, that they will never admit or wise up to the facts. That is because they have some... [ More ]

Reply #14

Rip Snorter — Sun, 14 Aug 2005 22:38:45 GMT

It took us over 250 years to get to the position we are in.Untrue. The income tax began during the early 20th Century to fund WWI. It was only a few decades after that we arrived in the position we're in now.... around the end of WWII.It sound be atleast double that to get back the original Constitution - which had no tax (because the Boston Tea Part was about taxes!).250 years won't be nearly long enough. The country's too perfect, the people too smart and proud to ever stand up to a governme... [ More ]

Reply #13

Chewie — Sun, 14 Aug 2005 22:03:09 GMT

Lets see, if fewer than 50% of any given populace bother to vote for their Congressperson, and the average cost to run for that position is close to a million dollars, and that person better be sqeeky-clean to the bone, I see no change in the system in several life times. If your platform to reduce entitlements by voting in the flat-tax, the lower income will start the busses running 24/7. It took us over 250 years to get to the position we are in. It sound be atleast double that to get back the... [ More ]

Reply #12

lchoro — Sun, 14 Aug 2005 21:53:30 GMT

[quote]Because the average rich person's revenue didn't come from a tax to begin with. Lotteries are a form of self taxation. This is why in Europe which is hardly known for low taxes doesn't tax lottery income.[/quote]Since the lotteries are primarily paid by the poor who pay little or no income taxes, the revenue is often being subjected to tax for the first time. The lowest two quintiles (the bottom 40%) actually receive a tax refund from the federal government exceeding the income taxes wit... [ More ]

Reply #11

konane — Sun, 14 Aug 2005 21:44:27 GMT

If enough people start educating themselves and demanding it of their Reps and Senators then they just may listen if it means staying in office. Never say never although it is an uphill battle that will not be easily won.

Reply #10

Chewie — Sun, 14 Aug 2005 21:37:47 GMT

Flat tax will never happen.You're asking a Congressperson to limit the amount of a pay raise they can give themself. The power of Congress come from MONEY. No way is a person going to put any sort of restriction on how they spend money. Money is power. The control of money is the ultimate power. What would happen to entitlements when the flat tax money runs out - will they be cut-off. Heheheheheh! Polyana thoughts! As long as Congress can raise a tax, they can buy anything they want. Think of a... [ More ]

Reply #9

dvdiva — Sun, 14 Aug 2005 20:55:01 GMT

Because the average rich person's revenue didn't come from a tax to begin with. Lotteries are a form of self taxation. This is why in Europe which is hardly known for low taxes doesn't tax lottery income. Also with heavy compition from Online and Indian casino's state lotteries need to offer something to it's players who are contributing to the state coffers by playing in games that support state expenses. People don't have to buy lottery tickets. Many prefer to try their luck at Indian casinos... [ More ]

Reply #8

four4me — Sun, 14 Aug 2005 16:20:11 GMT

we went to war over the tax issue because we were being over taxed without representation. And now we are being overtaxed again with representation by the people we vote into office. Reality bites big time doesn't it. Practically every person who runs for office says no more taxes. Then within a few months or more give or take a few. They go on record having said we need to adjust the tax rates because we need money for this or money for that.Just about every thing imaginable is taxed now includ... [ More ]

Reply #7

konane — Sun, 14 Aug 2005 16:09:38 GMT

BTW don't know how I managed to copy that 3 times .... was making some html changes and updated the blog but due to my inexperience copied it twice more than I wanted to so have asked Todd to wipe out the duplicates.

Reply #6

konane — Sun, 14 Aug 2005 15:45:35 GMT

I say we adopt the Fair Tax which eliminates all income tax, all payroll tax and in turn should wipe out all income taxes on lottery winnings.Check out the article in my blog which gives a rough outline of the proposal and highlights a recently written book which throroughly explains what the Fair Tax will accomplish. https://blogs.lotterypost.com/konane

Reply #5

Rip Snorter — Sun, 14 Aug 2005 13:35:42 GMT

why should they pay any less than a well-paid middle management executive who makes $ 200,000 and pays nearly a third of his income in taxes?Why, indeed. If there's a tax on 'earnings', how can winning a lottery be considered as somehow different than, say, selling a lot of some illicit recreational drug, which is taxable if they catch a person at it. Or getting paid some astronomical amount for prancing around a stage shouting into a microphone and waving an electric guitar? Or throwing and... [ More ]

Reply #4

lchoro — Sun, 14 Aug 2005 13:10:53 GMT

One could counter that argument with the fact that the lottery is mostly played by the poor and the poor pay little in income taxes. The bottom 20 percent in income have an effective average income tax rate of -4 percent because of the earned income credit and other tax credits targeted to the working poor. Almost all of the income taxes is borne by the top half of the working households with most of that coming from the top 10-20 percent. If anyone wins a million dollar prize, why should they... [ More ]

Reply #3

Rip Snorter — Sun, 14 Aug 2005 11:20:45 GMT

I think there's too much government and too much government spending for the good of the population, the future health of the economy, even the survivability of the nation over the long run. Too much regulation, too much defense spending and war propaganda, too much big brother, and too much taking responsibility for matters the citizenry ought to be handling for themselves.However, having said that, if there's going to be a completely pervasive, intrusive, paternal, suffocating government of t... [ More ]

Reply #2

golotto — Sun, 14 Aug 2005 07:24:21 GMT

I've always felt that all lottery winnings should be tax-free. (at the very least free of state taxes) It all boils down to the simple fact that the states are benefiting financially from the sale of the original tickets. They've already taken their substantial cut. Why should we all pay again when we match the numbers? We've already contributed a very large percentage of each dollar to the states and the various good causes simply by purchasing our tickets. It's only fair.... [ More ]

Reply #1

dvdiva — Sun, 14 Aug 2005 04:45:09 GMT

I totally agree. State lottery income should be both state and federal tax free.

Lottery Taxation

dphillips — Sat, 13 Aug 2005 19:52:37 GMT

There are about three countries that do not tax their lottery winnings...and excuse the English -- it ain't the United States. Wow, what a shame! Now, you would think our Uncle would give us a tax break...about twice a year, Thanksgiving and Christmas, by not taxing our lottery winnings: your actual take home pay would be the amount won!What can the US learn from those tax free lottery countries? Is the US government willing to listen?Finally, I agree we all (no exceptions) should pay our tax... [ More ]