Welcome Guest
Log In | Register )
You last visited December 4, 2016, 4:15 am
All times shown are
Eastern Time (GMT-5:00)

Should PB MM be tax-free/lump sum

Topic closed. 48 replies. Last post 9 years ago by konane.

Page 1 of 4
PrintE-mailLink

Should PB and MM be tax free, lump sum actual amount payout?

Yes! [ 63 ]  [82.89%]
No. [ 4 ]  [5.26%]
I don't care as long as I win it. [ 9 ]  [11.84%]
Total Valid Votes [ 76 ]  
Discarded Votes [ 1 ]  
Avatar
Westerose
Canada
Member #52915
June 15, 2007
189 Posts
Offline
Posted: July 12, 2007, 1:16 am - IP Logged

Most Lotteries in the world outside of the US are Tax Free and the prize is paid out lump sum in the actual amount advertized. Do you feel Powerball and MegaMillions should do this as well?

You live a life of abundance! You have won the lottery! Belief creates reality! Believe!

    Coin Toss's avatar - shape barbed.jpg
    Zeta Reticuli Star System
    United States
    Member #30470
    January 17, 2006
    10345 Posts
    Offline
    Posted: July 12, 2007, 2:14 am - IP Logged

    Yeah, they should, but it can't happen while the U.S. taxes gambling winnings.

    U.S. gambling laws border on the ridiculous- when the Irish Sweepstakes was really popular, it was against the law to buy a ticket, but if you won, you were taxed.

     It's against the law to be a bookie, yet bookies are supposed to register, pay $50, and get a tax stamp (as are drug dealers).

    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

    Lep

    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

      Badger's avatar - adu50016 NorthAmericanBadger.jpg
      Wisconsin
      United States
      Member #1303
      March 27, 2003
      1508 Posts
      Offline
      Posted: July 12, 2007, 7:45 am - IP Logged

      Most Lotteries in the world outside of the US are Tax Free and the prize is paid out lump sum in the actual amount advertized. Do you feel Powerball and MegaMillions should do this as well?

      Most definitely !  Our govt has a real nasty habit of re-taxing our dollars.  The dollars spent on lotteries have already been taxed when they were earned.  Then if you don't win, that is another tax ; albeit a voluntary one.  If you do win, they tax the already-taxed dollars again.

      If they could, they would re-tax and re-tax until there was nothing left.  Then they'd spend it on something ridiculous that is not needed, like many of their pork projects. No politician seems to have ever met a taxing opportunity that he/she didn't like.

      ============

      How can you tell if a politician is lying?

      Answer: His lips are moving.

        hearsetrax's avatar - 0118

        United States
        Member #52345
        May 21, 2007
        2657 Posts
        Offline
        Posted: July 12, 2007, 8:36 am - IP Logged

        Most definitely !  Our govt has a real nasty habit of re-taxing our dollars.  The dollars spent on lotteries have already been taxed when they were earned.  Then if you don't win, that is another tax ; albeit a voluntary one.  If you do win, they tax the already-taxed dollars again.

        If they could, they would re-tax and re-tax until there was nothing left.  Then they'd spend it on something ridiculous that is not needed, like many of their pork projects. No politician seems to have ever met a taxing opportunity that he/she didn't like.

        I Agree!

          CCHS13's avatar - chi jpeg.jpg
          Illinois
          United States
          Member #46704
          September 23, 2006
          3692 Posts
          Offline
          Posted: July 12, 2007, 8:39 am - IP Logged

          In the good ol US to expect anything not to be taxed is a little unrealistic but that would

          be too much like right and we know that will never happen.  On a more realistic note the

          taxes should definetly be reduced.  I think its approx 25% just for Federal and that is

          just way too high.  They win the lottery everytime somebody wins

          Men Lie Women Lie Numbers Dont

            Guru101's avatar - rw6jhh
            Indiana
            United States
            Member #48725
            January 7, 2007
            1953 Posts
            Offline
            Posted: July 12, 2007, 10:14 am - IP Logged

            Just let me win. I'll let you know after that.Big Grin

            Gonna win.Big Smile

              Avatar
              Indiana
              United States
              Member #29196
              December 29, 2005
              280 Posts
              Offline
              Posted: July 12, 2007, 10:39 am - IP Logged

              As to the first part of the question...Yes lottery winnings should be tax free...as they are almost everywhere else in the world.

              As to the second part...Yes Powerball and Megamillions should do away with the deceptive practice of advertising the annuity as the jackpot prize and the ridiculous notion of a "cash value."  No other business in the U.S. would be able to operate this way.  

              Let's face it...U.S. lotteries do this because they believe...with some justification...that larger jackpots sell more tickets.  So they have come up with this nonsense in order to convince the masses that the jackpot is larger than it actually is.  The practice is inherently deceptive and misleading.  And it is intentionaly so.

              Try this:

              Go into a bar and make a $100 bet.  When you loose give the person $30.  When they say "Hey what gives?  You owe me $100."  Tell them; "Well you wanted to be paid now.  The cash value of our bet is 40%.  And since gambling winnings are taxable I have to withhold the tax too.  Of course if you want the full $100 I will pay you $10 a year for the next 10 years...minus taxes of course.  Or just like with Powerball I'll give you an increase every year for inflation.  I'll pay you $5.65 the first year...$5.80 the second year...$6.05 the third...etc..etc..."  

              If you get away with this...and you're able to walk out of the bar on your own...you can laugh yourself silly all the way home.

              Jim 


              Money frees you from doing things you dislike.  Since I dislike doing nearly everything, money is handy.  - Groucho Marx

                LuckyLilly's avatar - savy chick.png

                United States
                Member #50124
                February 26, 2007
                601 Posts
                Offline
                Posted: July 12, 2007, 11:24 am - IP Logged

                Yes, lottery winnings should be tax free, as should sweepstakes prizes.

                Do I see the govt swinging that way any time soon?  Nope.  In fact my state just added a tax on lottery winnings after we got our first big powerball winner a decade ago, and they did the math on how much more income the lottery could make for the state if they imposed that 7.9% tax.  Unfortunately powerball didn't have a cash option at the time and the poor woman who won before the tax was enacted now has to pay taxes on the annuity each year. 

                  justxploring's avatar - villiarna
                  Wandering Aimlessly
                  United States
                  Member #25360
                  November 5, 2005
                  4461 Posts
                  Offline
                  Posted: July 12, 2007, 11:33 am - IP Logged

                  I checked "Just let me win" but of course I wish prizes weren't taxed.  Still, the money is a form of income.  I only think the rate is way too high.

                  So my answer is somewhere in the middle.  I wish they wouldn't tax lottery wins so heavily, but if I win "only" the $20 million Florida jackpot on Saturday I will not complain, although I think 35% is highway robbery and usually winners end up owing much more than the 25% deducted by the Lottery. If the Lottery prizes are taxed, perhaps they should be thought of as "capital gains" on which taxes are lower.  After all, you've made an investment for many years (I have for over 30 years!) and now you are getting your return on that investment.

                  For those of us who are writing it's double taxation, you're now saying the lottery is a form of tax, which it isn't since it is voluntary.  Of course the government taxes us over and over again.  I mean if you work and pay income tax, you use that same money (which has been taxed) to buy a home and then pay all sorts of tax on the home that you bought with income you were already taxed on.  Keep in mind that your income tax is probably being used to build a home for someone in IRAQ who will probably train his children to come here and bomb your home.

                    Avatar
                    NY
                    United States
                    Member #23835
                    October 16, 2005
                    3474 Posts
                    Offline
                    Posted: July 12, 2007, 11:57 am - IP Logged

                    Most definitely !  Our govt has a real nasty habit of re-taxing our dollars.  The dollars spent on lotteries have already been taxed when they were earned.  Then if you don't win, that is another tax ; albeit a voluntary one.  If you do win, they tax the already-taxed dollars again.

                    If they could, they would re-tax and re-tax until there was nothing left.  Then they'd spend it on something ridiculous that is not needed, like many of their pork projects. No politician seems to have ever met a taxing opportunity that he/she didn't like.

                    Do you suppose your plumber's income should be tax free? After all, the money you spent having the plumbing done had already been taxed, right? Money changes hands. If it didn't there wouldn't be any need to have it. Just because somebody had the money before it worked its way to you doesn't mean it's double taxation when you have to pay income tax on your earnings.

                    FWIW, pork barrel projects annoy me as much as the next guy, but if the government spent a billion dollars a year having people dig ditches and another billion having people fill the ditches right behind them it wouldn't be nearly as big a waste as you might think.  That's precisely because the money would move around and help the economy. The government  would get a big chunk back right away as income taxes so the cost wouldn't really be $2 billion, and everyone who earned money digging and filling ditches would spend or invest whatever wasn't paid in taxes. That would let other people make money (and of course they'd pay taxes on the income), which they'd  spend and invest.  The problem with government spending isn't nearly so much about the amount they spend it on as what they spend it on.  $2 billion for pointlessly moving dirt can help the economy, but there are much better ways to spend $2 billion.

                      Avatar
                      NY
                      United States
                      Member #23835
                      October 16, 2005
                      3474 Posts
                      Offline
                      Posted: July 12, 2007, 12:12 pm - IP Logged

                      Yeah, they should, but it can't happen while the U.S. taxes gambling winnings.

                      U.S. gambling laws border on the ridiculous- when the Irish Sweepstakes was really popular, it was against the law to buy a ticket, but if you won, you were taxed.

                       It's against the law to be a bookie, yet bookies are supposed to register, pay $50, and get a tax stamp (as are drug dealers).

                      It's not that gambling winnings are taxed. Income is taxed, except when it's exempt for some reason.  Should lottery winnings be tax-exempt? Most lottery winnings are already exempt in practice, since most of the payouts are under the reporting threshold. I don't know about the rest. If I won I'd sure  like it, but if the guy across the street is lucky enough to get a few million bucks I don't see much of a problem with him paying taxes on it.  I do think that legitimate losses shouldn't be limited to the year in which a big win is collected, though.

                      As far as being lump sum, PB and MM already are lump sum.  Like Uncle Jim and others I think the advertising should be completely honest, and that means they should advertise what they have to pay out now, not an imaginary amount that can be earned by investing it and collecting later. Most of us can look at an ad  for a lottery and know how much we'd really end up with, so we can at leats make an informed decision about the risk and reward, but I agre with Jim that no other business can get away with what the lottery does.

                      I'm guessing that you don't think that income from illegal activities should be tax-exempt, so I'm not sure what point you're making. If an adult wants to gamble away their life savings I figure they should be free to do so, but nobody else should have to bail them out. IMHO, none of the victimless crimes should be crimes. Tax stamps are definitely an odd concept, but they've made money because collectors buy them, and in some cases dealers who aren't convicted for dealing still get convicted on various tax charges. Everyone knows about Al Capone, right?

                        Coin Toss's avatar - shape barbed.jpg
                        Zeta Reticuli Star System
                        United States
                        Member #30470
                        January 17, 2006
                        10345 Posts
                        Offline
                        Posted: July 12, 2007, 1:13 pm - IP Logged

                        KYFloyd

                        My point is how does the same government that declares something illegal demand that those who do that activity as a business have to register to get a tax stamp.  

                        Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                        Lep

                        There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                          Avatar
                          Westerose
                          Canada
                          Member #52915
                          June 15, 2007
                          189 Posts
                          Offline
                          Posted: July 13, 2007, 3:53 pm - IP Logged

                          The "NO" vote on this poll is proof enough for me that the IRS monitors this website lmao!!!

                          You live a life of abundance! You have won the lottery! Belief creates reality! Believe!


                            United States
                            Member #17555
                            June 22, 2005
                            5582 Posts
                            Offline
                            Posted: July 13, 2007, 4:23 pm - IP Logged

                            I don't know about most countries, but with Canada and Australia, they can afford not to tax the winners because the whole country is paying into one game.

                            The money coming in is so much more than the payout, they just use that huge surplus for tax purposes.

                            If this country had a nationwide version of Powerball or whatever, then we would have the same benefits as  Canada and Australia.

                              Coin Toss's avatar - shape barbed.jpg
                              Zeta Reticuli Star System
                              United States
                              Member #30470
                              January 17, 2006
                              10345 Posts
                              Offline
                              Posted: July 13, 2007, 6:53 pm - IP Logged

                              pacattack05

                              I can't remember who but an Aussie here on LP once posted that in Australia the tickets are $1.03 and the $.03 is what pays the tax.  

                              Pretty slick. Not only do the losers pay the winner (and the house keeps its take, i.e., most of it) but the losers pay the tax for the winner, too.

                              I'd like to see U.S. lotteries go to that- but with a rule that the $.03 doesn't steadily increase and increase.  

                              Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                              Lep

                              There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.