Ka-ching! Wednesday’s Powerball jackpot soared to $1.5 billion as get-rich-quick mania seized America this week. But you don’t need to wait for the drawing to know who’ll score the royal payoff.
The biggest winner of the multistate numbers game is — drumroll, please — Uncle Sam. Powerball is a government-sponsored gambling racket in 44 states, plus Washington, D.C., Puerto Rico and the Virgin Islands. The feds automatically skim 25 percent off the top of a lump-sum cash award. Additional state withholding taxes vary depending on residency status. Mega-winners are taxed at the highest federal income tax bracket (nearly 40 percent); those who live in states with personal income taxes could pay up to an additional 9 percent. Local municipal taxes can add another 3-5 percent to the tax burden.
Government lotteries of all kinds raked in a whopping $70 billon in revenue last year, according to the North American Association of State and Provincial Lotteries. Cash-strapped states pitch the rackets as civic enterprises by purporting to earmark a portion of proceeds for public education, economic development and mass transit, senior citizens’ programs, professional sports stadiums and environmental protection.
As I’ve noted during previous, high-stakes lotto crazes, the state bureaucrats who run these schemes for numeracy-challenged consumers are free to ban outside competition — including private slot machines, phone betting, instant pull tabs and card rooms. The feds help out by limiting sweepstakes and Internet gambling, as well as exempting state lottery marketing materials from Federal Trade Commission regulations that guarantee truth in advertising.
That’s right. While cracking down on ads on everything from cereal to toothpaste to cars, Washington protects states that spend hundreds of millions of dollars every year falsely promising “a dollar and a dream,” “everyone is a winner” and “somebody’s gotta win — might as well be you.”
In New York last fall, the attorney general outlawed fantasy sports league as illegal games of chance that deceptively hooked in the gullible — while the state lottery promoted its motto, “Hey, You Never Know.”
I know double-standards sanctimony when I see it.
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And don't forget, it all goes to education!
ReplyDeleteIt's just another tax.
ReplyDeleteThe three big winners were in California, Tennessee and Florida. Fortunately, neither of those states taxes lottery winnings!
ReplyDeleteAccording to powerball.com, the lump sum is currently only 62% of the advertised jackpot. After that the federal income tax on it will be another 39.6%, then according to the Maryland Comptrolers website, the Maryland tax would be another $15,072.50 plus 5.75%. If the sole winner resided in MD, he/she would have brought home just over 508mil of the original 1.5bil.
ReplyDeleteThen your hit with annal taxes on that if not Protected right. Guess the caymens and swiss banks are out as a haven now. Since the biggest mafia in the world the United States government is in charge. So you won't be able to hide and they will get almost all that money one way or the other. But hey for 508 mil i could deal. my first order of bussines...LEAVE MARYLAND!!!
ReplyDelete