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If you can choose to give up your winnings in exchange for being never hungry or homeless...

Topic closed. 33 replies. Last post 4 years ago by Teddi.

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Toronto
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Member #138397
January 26, 2013
179 Posts
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Posted: May 15, 2013, 10:16 pm - IP Logged

That's a really good point, whiteballz. Another point if you think about it, is that the government is robbing your money by deducting 25% right away. 

 

Let's say your lumpsum amount is 100,000,000 for the sake of simplicity and that you can get a 5% interest and won on jan 1st.

 

The government deducts 25%, which is 25,000,000. If you kept that 25 million and invested it until the end of the year, you'd've earned 1,250,000 in 

interest. Of course, that income would be taxed. Normally your investments would be in dividend stocks or something, so the tax rate is less. But even 

assuming a 39.6% tax-rate like normal, the government robbed you of nearly 500,000 dollars!

    Teddi's avatar - Lottery-008.jpg

    United States
    Member #142499
    May 13, 2013
    1182 Posts
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    Posted: May 15, 2013, 10:53 pm - IP Logged

    That's a really good point, whiteballz. Another point if you think about it, is that the government is robbing your money by deducting 25% right away. 

     

    Let's say your lumpsum amount is 100,000,000 for the sake of simplicity and that you can get a 5% interest and won on jan 1st.

     

    The government deducts 25%, which is 25,000,000. If you kept that 25 million and invested it until the end of the year, you'd've earned 1,250,000 in 

    interest. Of course, that income would be taxed. Normally your investments would be in dividend stocks or something, so the tax rate is less. But even 

    assuming a 39.6% tax-rate like normal, the government robbed you of nearly 500,000 dollars!

    I Agree! Totally, utterly and completely. Hellooooooo miracle ROFL

    Someone needs to explain to me why they have to take the 25% right away. Prior to this year they waited for the other 10%, and this year they will wait for the other 14%, why can't they wait for that 25% too.

    The interest on that would help to not make it seem like you're getting an anal probe from Wolverine. That or they need to rewrite what a lottery win should be considered so the taxes can be lowered or offset.

    When even England (from what i can tell has some kind of erotic fixation on the amount of taxes they can levy on pretty much everything) doesn't take taxes out of lottery wins, maybe we don't need to tax it either. 

     

    As to the original question, I think you need to provide what the jackpot amount is. If it's say a billion, then option 2. if it's a million then option 1.

    PBS will get my money either way as long as they keep Downton Abbey going. Gotta get my DA fix.


      United States
      Member #142348
      May 9, 2013
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      Posted: May 15, 2013, 11:02 pm - IP Logged

      I Agree! Totally, utterly and completely. Hellooooooo miracle ROFL

      Someone needs to explain to me why they have to take the 25% right away. Prior to this year they waited for the other 10%, and this year they will wait for the other 14%, why can't they wait for that 25% too.

      The interest on that would help to not make it seem like you're getting an anal probe from Wolverine. That or they need to rewrite what a lottery win should be considered so the taxes can be lowered or offset.

      When even England (from what i can tell has some kind of erotic fixation on the amount of taxes they can levy on pretty much everything) doesn't take taxes out of lottery wins, maybe we don't need to tax it either. 

       

      As to the original question, I think you need to provide what the jackpot amount is. If it's say a billion, then option 2. if it's a million then option 1.

      PBS will get my money either way as long as they keep Downton Abbey going. Gotta get my DA fix.

      That is easy, most people who get the 25% deducted did not win 100 million dollars. When people win a prize of say $50,000  - You'd be amazed how many of them would go buy a car and pay off their bills and then have nothing left to give the tax man in April.  So now they take 25% right away to prevent getting shorted.  When is the best time to take a persons money? Before they get it.  It is also the reason they take money from your paycheck every week.  If they let you hold onto it until april, how many millions of americans would have spent it all and have nothing to give.

        Teddi's avatar - Lottery-008.jpg

        United States
        Member #142499
        May 13, 2013
        1182 Posts
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        Posted: May 15, 2013, 11:49 pm - IP Logged

        That is easy, most people who get the 25% deducted did not win 100 million dollars. When people win a prize of say $50,000  - You'd be amazed how many of them would go buy a car and pay off their bills and then have nothing left to give the tax man in April.  So now they take 25% right away to prevent getting shorted.  When is the best time to take a persons money? Before they get it.  It is also the reason they take money from your paycheck every week.  If they let you hold onto it until april, how many millions of americans would have spent it all and have nothing to give.

        I considered that, and then I thought, if no matter what, they are going to get that 39.6 from you, why not take it all up front? (knock on wood). The amount seems arbitrary. They have no guarantee they'd be getting that other almost 15% either. If they feel they have to take something right away, then take the 14.6% first, and wait for the 25%

        And, since that 39.6% only applies to $1M or more, it is conceivable that they would collect more $$ in taxes if they waited until tax time than if they took it straight away. 

        Ties in nicely with my theory that the lottery should provide financial counseling to everyone who wins a million or more. They advise the winners to invest, or put it in insured savings accounts so they can start earning interest right away. By the time it's tax season, the winner has more $$ overall and the government gets more. Win-win. I think, someone check my math and see, but I think that's right.