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Can't Feed the Pig when Uncle Sam & The Lottery Steals all the Food

Topic closed. 14 replies. Last post 9 years ago by MeFirstYouLast.

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Pittsburgh, PA
United States
Member #58600
February 21, 2008
43 Posts
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Posted: May 15, 2008, 11:34 pm - IP Logged

WARNING: LONG READ AHEAD

I am truly sick to my stomach after analyzing the numbers of the PA Lottery. 

I'm using PA as an example, but Im sure whatever state you live in, the numbers are most likely similar.  Right now, for every dollar in ticket sales, only $0.38 is returned to the players.  I always believed the numbers were closer to 50/50, but thats not the case.  So right now, if PA sold $1,000,000 of Cash 5 tickets, the pool is only going to be around $300k-$400k.  Pretty significant chunk of change taken out in my opinion. 

I once knew of a bookie who actually ran a numbers operation based off of the pick 3.  I always wondered how he was able to pay twice the odds that the PA Lottery did.  Now I know why these illegal operations exist.

Hey I'm all up for gambling benefiting a good cause, but when it exceeds more than 50%, I think major reform needs to take place.  Overall, the lottery is a sucker game for players.  I don't care if you use some kind of system that you think works, the fact of the matter is that 99.99% of all lottery players will be losers in the LONG RUN.  Yes, there have been some lucky people out there to win huge amounts of money, including myself, but if everyone here was going to play regularly for 1,000 years straight we all would be losing players because of the payout structure of any lottery out there. 

In my opinion, the amount taken from the pool should be capped around 33%.  This would eliminate some of the illegal gambling that takes place based off the state lotteries and would also return a significant amount to the players.  If it wasn't for the players, these games would not exist and there would be ZERO benefits to the state.  I don't know the exact numbers, but how many big wigs at the PA Lottery do you think make more than 6 figures a year in salary.  The operating costs are ridiculous and if you just happen to work for the lottery you should be ashamed.  If they can't operate with a budget of 1/3 of over $4 BILLION then they really aren't trying in the first place.

That's my first beef.  Not enough is returned to the player.

Now look what happens if youre lucky enough to win.  Already, the state has taken 62% of what has been gambled.  Let's say hypothetically you win a jackpot with a cash option worth $10,000,000.  We got to feed Uncle Sam so we can go build bridges (wink, wink), better roads (haha), and of course make more nuclear bombs that could destroy the world a billion times over. 

So out of that $10,000,000 you just won, Uncle Sam is going to want 35%.  The State of PA is still hungry and will want another 6%.  In my opinion, this is double taxation at least at the state level.  Oh, and lets not forget that you must pay social security, unemployment, medicare, and local taxes.  Another couple percent right there.  

Overall, out of that $10,000,000 you're going to be left with somewhere around $5,600,000 if you live in the city of Pittsburgh.  Yes, there are ways to reduce you're tax bill but that's another post.  So mathematically speaking, out of $25,000,000 put in by the players, the actual winner only receives about ONE-FIFTH (20%).  WOW, pretty sick huh.  The winner gets around $5m after taxes, and the government gets around $20m.  Insane. Ridonkulous. Excuse me while I puke.

It gets better.  Let's say you now want to buy a $500,000 house right outside the city you live in that has a nice view.  Guess what, if it's a new one, the property, school, and municipal taxes on it are going to be around $12k-$15k a year depending of the tax district of course.  So let's assume you got good advice and have $4m or so resting in a safe place earning you 3% a year.  The economy sucks right now that that's probably the best "safe" rate you'll get.  So that safe account is going to earn you approximately $120,000 a year BEFORE taxes.  Of course you can yield a higher return, but the risk also goes up with that kind of thinking.  Call me a sucker for safe money I suppose.  I don't got the nerve nor patience to play the stock market.  So let's assume you have a very good accountant and you clear $80,000 a year.  Throw in your property taxes and other taxes, you're left with about $65,000 a year.  Hey, not bad at all for really not doing anything.  However, that's certainly not the lifestyle you dream of when you win a $10,000,000 jackpot.  Throw in expenses, insurances, utilities, and you finally realize you can't do all those things you wanted to do without touching the principal.  This is the number one reason why a lot of winners go broke.  It's because they don't realize the tax ramifications on having such a large amount of money, and some basically overspend immediately and dig themselves a hole right off the bat.  And oh yeah, don't you dare try to help out a friend or family member because you'll be paying tax on anything you give them over $12,000.

You're probably thinking yeah I know this or so what, but I'm just pointing out how the players get screwed for the most part.  In the long run, you could correctly say the government will get every single cent of what's played by either taking it from the get-go or taxing the hell out of you. 

So when you elect me president (lol), I will reform how the lotteries operate and return more to the players.  I will also eliminate all federal, state, and local tax on lottery and gambling winnings like some other countries do.  So when Uncle Sam says hey feed your piggy bank so you can retire, I ask him, will you leave me some so I can do this?  Right now as a new grad of Pitt, I'm begging to even get a job in this horrible economy. 

:End Rant

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    San Diego, CA
    United States
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    February 12, 2008
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    Posted: May 15, 2008, 11:47 pm - IP Logged

    First the issue of whether it is worth it to pay the lottery.  I took a statistics class in college.  My professor determined that mathematically it does not pay off in the long run to play the lottery. 

     

    As for the tax issue, tax payers do get some return on their tax dollars.  Either now (roads, defense, police, government agencies)  or the future (social security).  I do not know what the exact percentage is.   The tax issue is not as bad as you present.

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      Pittsburgh, PA
      United States
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      February 21, 2008
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      Posted: May 15, 2008, 11:55 pm - IP Logged

      First the issue of whether it is worth it to pay the lottery.  I took a statistics class in college.  My professor determined that mathematically it does not pay off in the long run to play the lottery. 

       

      As for the tax issue, tax payers do get some return on their tax dollars.  Either now (roads, defense, police, government agencies)  or the future (social security).  I do not know what the exact percentage is.   The tax issue is not as bad as you present.

      Ok then please counter my post with example and fact.  And if you really think my generation (20-30 year olds) are going to see social security, then you are kidding yourself. 

      I tried my best to show the government gets 80% and the player will only get 20% of the total prize pool.  Of course, it's not worth playing, but what I am saying it's the best running racket in America.  No one plays to win long run anyways, however the fact is that the players get fleeced big time. 

      I mean if everyone is ok with the fact that other countries don't tax gambling winnings but we do, then that's your opinion.  And guess what, some of these countries can afford universal health care along with all those things you listed.  Just another fact.  Stop being such a patriot.

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        San Diego, CA
        United States
        Member #58386
        February 12, 2008
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        Posted: May 16, 2008, 12:08 am - IP Logged

        Their is a price to live in the greatest country in the world.  The US government needs every tax dollar it can get.  This country has a lot of expenses (both domestically and abroad).  We are the most giving country in the world.  Helping other countries costs money.  There is goodwill that comes back to us with the help we give others. 

        A lot of tax dollars goes to things like health research which benefits everyone in the long run.  Dude, that is what this country is about.  Being a leader in everything (health (quality), education, defense) costs money.  Making the world a better place costs money.  Someone has to do it.

        I would think of it this way.  If we weren't a superpower during the 1940's, Germany might still control all of Europe.  This planet would be hell.  People abroad complain that we police the world.  Someone has to do it.  Or another a**hole like Hitler might try and take control of the world. 

        This country might not be for you.

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          Pittsburgh, PA
          United States
          Member #58600
          February 21, 2008
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          Posted: May 16, 2008, 12:48 am - IP Logged

          Their is a price to live in the greatest country in the world.  The US government needs every tax dollar it can get.  This country has a lot of expenses (both domestically and abroad).  We are the most giving country in the world.  Helping other countries costs money.  There is goodwill that comes back to us with the help we give others. 

          A lot of tax dollars goes to things like health research which benefits everyone in the long run.  Dude, that is what this country is about.  Being a leader in everything (health (quality), education, defense) costs money.  Making the world a better place costs money.  Someone has to do it.

          I would think of it this way.  If we weren't a superpower during the 1940's, Germany might still control all of Europe.  This planet would be hell.  People abroad complain that we police the world.  Someone has to do it.  Or another a**hole like Hitler might try and take control of the world. 

          This country might not be for you.

          LOL.  Leader in education?  Leader in health care?  Really?  Let's not even debate defense spending because you'd lose.  Anyways, last time I checked we were ranked just above Cuba around #39 in the world when it came to education.  Hardly a leader there.  Sure we spend and spend and spend, yet the results speak for themselves.  The only thing we are a leader in is spending money wrecklessly and going into debt.  Health care, we are innovative I agree, but that comes at a price (i.e. the number of people who can't afford it). 

          And this country is perfect for me by the way.  Isn't the main foundation of this country built upon the premise that I'm allowed to speak my mind and question the government.  You'll think differently one day when the issues hit you personally.   

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            San Diego, CA
            United States
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            February 12, 2008
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            Posted: May 16, 2008, 12:54 am - IP Logged

            You certainly are allowed to speak your mind. 

            But you don't seem happy here.  Maybe you would be happier in another country where there is universal health care, where you can win the lottery without paying taxes,  and your tax dollars don't go towards defense. 

            It is expensive living in this country.

            And you are right about the point when the issues hit home.  I might feel the say way as you.  And if I felt the same way as you, I might feel that I would be happier living in another country.

             

            And just like you can speak your mind, I am allowed to speak mine.  I can be a "patriot" if I damn well please.

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              San Diego, CA
              United States
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              February 12, 2008
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              Posted: May 16, 2008, 1:54 am - IP Logged

              You certainly are allowed to speak your mind. 

              But you don't seem happy here.  Maybe you would be happier in another country where there is universal health care, where you can win the lottery without paying taxes,  and your tax dollars don't go towards defense. 

              It is expensive living in this country.

              And you are right about the point when the issues hit home.  I might feel the say way as you.  And if I felt the same way as you, I might feel that I would be happier living in another country.

               

              And just like you can speak your mind, I am allowed to speak mine.  I can be a "patriot" if I damn well please.

              BTW, it HAS crossed my mind to leave this counrty.  As much as I love it, I realize it might not be for me.  Mostly for financial reasons.

                jackpotismine's avatar - kanji for_peace.jpg
                Kunming
                China
                Member #57910
                January 23, 2008
                3626 Posts
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                Posted: May 16, 2008, 4:50 am - IP Logged

                WARNING: LONG READ AHEAD

                I am truly sick to my stomach after analyzing the numbers of the PA Lottery. 

                I'm using PA as an example, but Im sure whatever state you live in, the numbers are most likely similar.  Right now, for every dollar in ticket sales, only $0.38 is returned to the players.  I always believed the numbers were closer to 50/50, but thats not the case.  So right now, if PA sold $1,000,000 of Cash 5 tickets, the pool is only going to be around $300k-$400k.  Pretty significant chunk of change taken out in my opinion. 

                I once knew of a bookie who actually ran a numbers operation based off of the pick 3.  I always wondered how he was able to pay twice the odds that the PA Lottery did.  Now I know why these illegal operations exist.

                Hey I'm all up for gambling benefiting a good cause, but when it exceeds more than 50%, I think major reform needs to take place.  Overall, the lottery is a sucker game for players.  I don't care if you use some kind of system that you think works, the fact of the matter is that 99.99% of all lottery players will be losers in the LONG RUN.  Yes, there have been some lucky people out there to win huge amounts of money, including myself, but if everyone here was going to play regularly for 1,000 years straight we all would be losing players because of the payout structure of any lottery out there. 

                In my opinion, the amount taken from the pool should be capped around 33%.  This would eliminate some of the illegal gambling that takes place based off the state lotteries and would also return a significant amount to the players.  If it wasn't for the players, these games would not exist and there would be ZERO benefits to the state.  I don't know the exact numbers, but how many big wigs at the PA Lottery do you think make more than 6 figures a year in salary.  The operating costs are ridiculous and if you just happen to work for the lottery you should be ashamed.  If they can't operate with a budget of 1/3 of over $4 BILLION then they really aren't trying in the first place.

                That's my first beef.  Not enough is returned to the player.

                Now look what happens if youre lucky enough to win.  Already, the state has taken 62% of what has been gambled.  Let's say hypothetically you win a jackpot with a cash option worth $10,000,000.  We got to feed Uncle Sam so we can go build bridges (wink, wink), better roads (haha), and of course make more nuclear bombs that could destroy the world a billion times over. 

                So out of that $10,000,000 you just won, Uncle Sam is going to want 35%.  The State of PA is still hungry and will want another 6%.  In my opinion, this is double taxation at least at the state level.  Oh, and lets not forget that you must pay social security, unemployment, medicare, and local taxes.  Another couple percent right there.  

                Overall, out of that $10,000,000 you're going to be left with somewhere around $5,600,000 if you live in the city of Pittsburgh.  Yes, there are ways to reduce you're tax bill but that's another post.  So mathematically speaking, out of $25,000,000 put in by the players, the actual winner only receives about ONE-FIFTH (20%).  WOW, pretty sick huh.  The winner gets around $5m after taxes, and the government gets around $20m.  Insane. Ridonkulous. Excuse me while I puke.

                It gets better.  Let's say you now want to buy a $500,000 house right outside the city you live in that has a nice view.  Guess what, if it's a new one, the property, school, and municipal taxes on it are going to be around $12k-$15k a year depending of the tax district of course.  So let's assume you got good advice and have $4m or so resting in a safe place earning you 3% a year.  The economy sucks right now that that's probably the best "safe" rate you'll get.  So that safe account is going to earn you approximately $120,000 a year BEFORE taxes.  Of course you can yield a higher return, but the risk also goes up with that kind of thinking.  Call me a sucker for safe money I suppose.  I don't got the nerve nor patience to play the stock market.  So let's assume you have a very good accountant and you clear $80,000 a year.  Throw in your property taxes and other taxes, you're left with about $65,000 a year.  Hey, not bad at all for really not doing anything.  However, that's certainly not the lifestyle you dream of when you win a $10,000,000 jackpot.  Throw in expenses, insurances, utilities, and you finally realize you can't do all those things you wanted to do without touching the principal.  This is the number one reason why a lot of winners go broke.  It's because they don't realize the tax ramifications on having such a large amount of money, and some basically overspend immediately and dig themselves a hole right off the bat.  And oh yeah, don't you dare try to help out a friend or family member because you'll be paying tax on anything you give them over $12,000.

                You're probably thinking yeah I know this or so what, but I'm just pointing out how the players get screwed for the most part.  In the long run, you could correctly say the government will get every single cent of what's played by either taking it from the get-go or taxing the hell out of you. 

                So when you elect me president (lol), I will reform how the lotteries operate and return more to the players.  I will also eliminate all federal, state, and local tax on lottery and gambling winnings like some other countries do.  So when Uncle Sam says hey feed your piggy bank so you can retire, I ask him, will you leave me some so I can do this?  Right now as a new grad of Pitt, I'm begging to even get a job in this horrible economy. 

                :End Rant

                I agree with you Destined. The USA is the biggest Mafia. It use to be a great country a long time ago.  I enjoy living here in China. It's not as glamorous as the USA but I feel good being here. I would only want to go back to the USA to visit and maybe make some money and bring it here. 

                P.S. Don't believe everything you read and see about China.

                Play to win!

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                  Republic of Texas
                  United States
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                  January 9, 2008
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                  Posted: May 16, 2008, 5:44 am - IP Logged

                  Destined - this is the reason I tell myself to not quit my dayjob unless I hit $30m.

                  Destined & JWBlue - I don't begrudge my country for taking taxes - its all necessary, but you do have to draw the line somewhere. As I get older and become more active in my retirement planning, I am disgusted to find that they actually tax your social security income - money you have already paid into the government after they taxed it when you earned it. That is double taxation.

                  jackpotismine - don't beleive everything you read about the US either. Our media is obsessed with reporting only the negative. Believe what you see in the actions. What I believe about China is that the people are good people (like most Americans), but I see lead paint in our children's toys that poison our children, tainted pet food that kills our pets, less than standard pollution controls, and more carbon emmissions than the US. If China wishes to become a global economic leader, they need to act like a global economic leader.

                  face

                  singlewinnersinglewinnersinglewinner   

                    Badger's avatar - adu50016 NorthAmericanBadger.jpg
                    Wisconsin
                    United States
                    Member #1303
                    March 27, 2003
                    1508 Posts
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                    Posted: May 16, 2008, 6:44 am - IP Logged

                    Destined wrote : I mean if everyone is ok with the fact that other countries don't tax gambling winnings but we do, then that's your opinion. 

                    The problem is we keep electing people who are looking to tax everything they can in order to make up for their lack of answers to the country's problems.  They all like to spend every dollar they can, then they pose for holy pictures and try and make the average Joe think they are doing a great job. They will tax our undershorts if they can figure out a way to do it. They want every dime in your pocket because they have no clue as to how to conserve or cut back.  They only know how to spend.

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

                    How can you tell if a politician is lying?

                    Answer: His lips are moving.

                      jackpotismine's avatar - kanji for_peace.jpg
                      Kunming
                      China
                      Member #57910
                      January 23, 2008
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                      Posted: May 16, 2008, 6:54 am - IP Logged

                      Destined wrote : I mean if everyone is ok with the fact that other countries don't tax gambling winnings but we do, then that's your opinion. 

                      The problem is we keep electing people who are looking to tax everything they can in order to make up for their lack of answers to the country's problems.  They all like to spend every dollar they can, then they pose for holy pictures and try and make the average Joe think they are doing a great job. They will tax our undershorts if they can figure out a way to do it. They want every dime in your pocket because they have no clue as to how to conserve or cut back.  They only know how to spend.

                      I Agree!

                      Play to win!


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                        March 8, 2008
                        174 Posts
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                        Posted: May 16, 2008, 10:50 am - IP Logged

                        I Agree!

                        Most people have forgotten that Congress stopped voting for pay raises years ago - the public complained.  They passed a law that automatically raises their pay every year, minimum 10%.  They have no problem spending money, it doesn't come from them - if it costs more, they raise their pay higher.  Most laws exempt Congress from penalties, give theirselfs the best heatlth insurance policies on the planet, the best retirement investments on the planet, automatic pay raises, free parking at all Government facilities, free secrateries, free security, free travel.  Sure, our taxes are going to beneficial things!  Drive (it is akin to suicide to walk) through Philadelphia, see how well your taxes are spent! Every seen an ex-Congress person on welfare or in an unemployment line?  Ever seen an ex-Congress person who is not worth millions?  Thats what your taxes paid for.

                          DC81's avatar - batman39
                          MI
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                          Posted: May 16, 2008, 3:41 pm - IP Logged

                          Pretty much but unfortunately those same people will get elected again (or someone just like them) because the average person doesn't know any better and choose to be ignorant.

                          You can't predict random.

                            Badger's avatar - adu50016 NorthAmericanBadger.jpg
                            Wisconsin
                            United States
                            Member #1303
                            March 27, 2003
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                            Posted: May 16, 2008, 8:39 pm - IP Logged

                            Most people have forgotten that Congress stopped voting for pay raises years ago - the public complained.  They passed a law that automatically raises their pay every year, minimum 10%.  They have no problem spending money, it doesn't come from them - if it costs more, they raise their pay higher.  Most laws exempt Congress from penalties, give theirselfs the best heatlth insurance policies on the planet, the best retirement investments on the planet, automatic pay raises, free parking at all Government facilities, free secrateries, free security, free travel.  Sure, our taxes are going to beneficial things!  Drive (it is akin to suicide to walk) through Philadelphia, see how well your taxes are spent! Every seen an ex-Congress person on welfare or in an unemployment line?  Ever seen an ex-Congress person who is not worth millions?  Thats what your taxes paid for.

                            You know it has always been very suspicious to me how some of our elected congresspeople go into the job not being millionaires, but come out of the job (if they ever do) as multimillionaires.

                            Now would you suppose that is the reason they wanted to run for the office in the first place?

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

                            How can you tell if a politician is lying?

                            Answer: His lips are moving.


                              United States
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                              Posted: May 16, 2008, 9:02 pm - IP Logged

                              You know it has always been very suspicious to me how some of our elected congresspeople go into the job not being millionaires, but come out of the job (if they ever do) as multimillionaires.

                              Now would you suppose that is the reason they wanted to run for the office in the first place?

                              I would like to think that most people go into politics for the right reasons.  But it is like drug enforcement.  The financial temptation is always huge.  The lure of the media, pictures in the paper, invites to parties, golf trips around the world, idolizing by local merchants.  It is hard to remain humble when every one around you is praising your greatness, and naming bridges and streets after you. Sleeping on a paid for yacht only makes you want to live on one all the time.

                              It is like the lottery winners who keep saying they will never change.  They always do.  The one I remember most is the couple from NJ who won a huge jackpot and went on and on about how they would live in the same place forever.  A year later they bought a condo in Trump Tower in NYC.  They called the lottery the Big Game for a reason.  B-I-G B-U-C-K-S !