Lottery payouts typically have two options: lump sum at half the value of the winnings or a 30 year annuity at the full value. So this headline assumes lump sum reward and cuts the face value on that alone, then does a bunch of other hand waving to get you down the next 58%.
News journals that are owned/advertised by anti-tax republicans love to run out the "lottery was taxed too high" story, specifically targeting people who fancy themselves future lottery winners. It's all bullshit.
110
pumpkinseedoil @mander.xyz - 12mon
That's insane. In Europe when you'd win 1 billion € you get 1 billion €, no taxes, no lump sum reward.
12
UnderpantsWeevil @lemmy.world - 12mon
Its a moot point because you're never going to win the lottery.
9
Kaput @lemmy.world - 12mon
Are the lotteries state owned? In Quebec, that's why lotteries is not taxed. State lottery is a voluntary taxes in a itself
4
Trainguyrom @reddthat.com - 12mon
Lotteries historically were setup as a fundraising efforts by governments, hence taxing lottery winnings
4
Stern - 12mon
It's not taxes... well not all of it. The lotto advertises its prize as the sum total of a 30 year annuity. Currently Powerball has an estimated Jackpot of 163 Million. You can take the lump sum up front though. At present that lump sum is 73.9 million. After you get that, then you get taxed on it, reducing it to probably something like 40-50 million.
33
my_hat_stinks - 12mon
That seems incredibly scammy to me. They're pretending the prize is double what it actually is and then claim even more of that back as taxes. If the actual prize money is only 20% of what you're advertising that's dishonest at best.
Where I am lottery winnings are tax-free and without an insane hidden 50% "claimed your winnings" fee. What they advertise is what you get if you win.
28
the_crotch @sh.itjust.works - 12mon
That seems incredibly scammy to me
Of course it does, it's the lottery
18
my_hat_stinks - 12mon
A lottery isn't necessarily inherently a scam, at least no more than gambling is in general. In practice the odds of winning are pretty poor compared to alternatives but as long as they're up front about the odds of winning I wouldn't call that a scam. Eg, this lottery lists the odds of winning each prize, though it would definitely be better if they published those on the main page rather than in the terms. A fairer lottery is possible pretty easily by adjusting the prize values, range of numbers to select, or how many numbers the gambler selects. This would kind of defeat the purpose of most lotteries to raise money for government, but personally I'm for more progressive taxes anyway.
Advertising one prize when the real prize is significantly lower is just lying and not an inherent trait of lotteries.
4
Stern - 12mon
On one hand, it does feel a bit scammy. On the other, I'm not gonna lose a lot of sleep if I only took home 50 million dollars from a 150 million jackpot. It's still a "Work? Sorry, I'm unfamiliar with peasant slang." amount of cash.
12
my_hat_stinks - 12mon
You're walking down the street and see a sign in a new sandwich place saying they have a three-for-one deal on, buy any one sandwich and get two sandwiches completely free. Sounds like a great deal, it might be a bit much but you skipped breakfast today and you can always keep one for later anyway, right? So you head inside and think about what you want, maybe you're cutting back on red meat and you're tired of chicken so you go with a tuna or cheese sandwich. You get to the counter to pick up your tuna+cheese sandwich, the worker hands over your two freebies and you walk out. Turns out you're hungrier than you thought so you practically inhale your tuna+cheese, barely savouring the flavour. You reach for your second sandwich but when you unwrap it you discover it's not the same as the one you ordered; it's bread with a thin smear of butter, technically it is a sandwich but it's definitely not what you wanted or expected when you ordered.
Did you get scammed? Are you okay with that since you still got one sandwich even though you chose that vendor because they advertised three?
It really shouldn't be a controversial statement to say that lying to people to get their money is wrong. If it really makes no difference as you're suggesting why can't they just advertise the real value instead?
2
Stern - 12mon
Not gonna read that incredibly tortured analogy. I hope you took it out back and shot it after you did those awful longwinded things to it though.
They do note the lump non-annuity value. The numbers I pulled were off the powerball website and were right next to each other. Different states (and even municipalities possibly.) tax differently (not at all in some cases), so its not as if they can give a solid number there.
7
my_hat_stinks - 12mon
Okay, I'll simplify. Store advertises three sandwich. You buy three sandwich. You get one sandwich. Store says fees+taxes ate other sandwiches. You say it's fine, you got sandwich. I say it's not, store lied.
They absolutely can give a solid number even when a lottery runs in areas with different taxes, they simply choose not to because they make more money that way and for some reason you lack regulation there. See for instance here where the prize money may be partially subjected to income tax, meaning tax varies wildly depending on the winner's other income:
£10,000 every month for 30 years. [..] However, based on tax rules and rates at the date of these Procedures, the monthly payments will not be less than £10,000 after tax.
So there's three obvious choices: mislead customers, calculate the correct prize after relevant taxes and advertise that, or give a fixed value and eat the cost of any taxes themselves. They chose the first one.
1
Maggoty @lemmy.world - 12mon
The US doesn't advertise taxes included generally whereas other countries do. Americans don't expect tax to be included on any price or income advertised. There are people who say we should change that, but we're stuck in the 1800's in so many ways.
8
DesertDwellingWeirdo @lemmy.world - 12mon
They should hold onto the lottery ticket and borrow against its value.
67
kameecoding @lemmy.world - 12mon
Instead of taking out the lump sum, you can have it paid in installments, they probably asked for lump sum, thus they get a much lower value.
Then you can do the math of whether or not it's worth it to receive monthly payment or taking out the lump sum, paying off all your debts, then putting it into S&P 500 and drawing down 4% a year and never run out of money.
At 400 million, that's what, 16 million a year? Never have to work again a day in their life, can spend 365 days a week in a 5- star hotel at a 1000-2000 dollar a night a 250 thousand car every year and haven't even spent 1/16 of his yearly liquidation.
33
migo @lemmy.dbzer0.com - 12mon
Thanks for your comment. People keep forgetting that even a couple of million would be enough for you to never work a single day in your life and have a nice middle class life. 400m is just the equivalent of 200 "comfortable middle class lives, forever"
18
Dentzy @sh.itjust.works - 12mon
We don't forget that, the comments are pointing to the fact that any rich person that got 2 billion through investments would end up paying less, no one is saying that 400 millions are not enough.
13
HertzDentalBar - 12mon
Such a joke. While I personally believe everyone should pay their fair share... Winning lotto or winning at the casino ect, should not be taxed.
However if you use that money and make more money with it you should be properly taxed.
47
petrol_sniff_king - 12mon
I think if they only advertised the post-tax number, there wouldn't really be a problem. Like, "hey, the jackpot is some amount, and after tax you could win 400 million"—that would be fine. As it is, they're kinda just building resentment for taxes in general by making your final winnings seem so disappointing, even though it's still 400 million.
62
RagingRobot @lemmy.world - 12mon
It's always on the consumer to pay all taxes for some reason. Even with sales tax. I didn't make a sale why am I the one paying the tax?
18
TheFriar @lemm.ee - 12mon
Hey, now. We don’t want to charge business taxes! That’s anti-business! We’re anti- people in this country. Businesses are tax exempt because they’re the real citizens. Those gross, floppy pEoPlE are what we use to make money for businesses!
19
petrol_sniff_king - 12mon
God, I hate sales tax. "This thing is $1.99? No it isn't."
3
wolfpack86 @lemmy.world - 12mon
But the amount is also variable as it's not a lump sum..
If you take lump sum and not the 30 year annuity, you take about a 50% hair cut off the prize money alone.
Not taxing the winnings at all, or just taxing them before they get into the pot, might be the easiest solution, I guess. My only contention with that is, well, now we're just edging into the fact that I don't really like lotteries. Certainly not on this scale.
4
DreamlandLividity @lemmy.world - 12mon
And its not like it is business profit, unless you can put the tickets you buy as business expenses. To me, it is in the same category as gifts. Should not be taxed.
1
Yawweee877h444 @lemmy.world - 12mon
I violently disagree with you.
Gambling and playing lottery is a method to take a risk and get essentially free money by doing nothing, other than taking the risk. Personally I think anything like this gambling related should be taxed up the wazoo. Definitely more than 50%. And that taxed amount should ideally go back to fund things like schools and stuff good for everyone.
Final note, if you ain't happy with 400M free money, you cray cray.
22
Coriza - 12mon
In my country the lottery is taxed at the collection step, so the money divided and advertised is already after taxes. I think that makes more sense, you collect the money and the law specifically distributes this taxed money for specific budgets and the winnings advertised are the real one.
18
seaplant @slrpnk.net - 12mon
The US effectively does both: the lotteries are run by the states and total prizes are much less than total ticket sales, generating net revenue for the state. Winnings are taxed like other income, meaning there are federal taxes and in many states state taxes.
9
Cataphract @lemmy.ml - 12mon
The whole system gets even worse when you look at it. They prop it up as an "education lottery", "This will help finance our schools!" In reality, they supplement education funding. I.E. they remove 2mil from state funding and put 2 mil in from the jackpot. They will continue lowering educational spending and use the assets in other areas they want.
When the lottery legislation was first written, it stated, “The net revenues generated by the lottery shall not supplant revenues already expended or projected to be expended for those public purposes, and lottery net revenues shall supplement rather than be used as substitute funds for the total amount of money allocated for those public purposes.” However, this sentence was removed right before voting, opening the door for legislators to use lottery revenues as a replacement for state funding.
The 2005 legislation stated lottery proceeds for education purposes would be allocated by the State Lottery Commission in the following manner: 50% for class-size reductions, 40% for school construction, and 10% for college scholarships. In 2013, lawmakers passed legislation giving themselves the power to allocate lottery proceeds for any education purposes, not just class-size reductions, school construction, and college scholarships.
In FY 2018, the majority of NC Education Lottery funding (57%) went to non-instructional support personnel, with 19% going to school construction, 12% to pre-kindergarten, 6% LEA transportation, 4% to need-based college scholarships, and 2% to UNC need-based aid. (link)
non-instructional support personnel, you know the over inflated administration that plagues education, now being supported by a lottery. Like most legislation, it started as something grand but slowly got mutilated till it's a net-negative effect.
4
EffortlessEffluvium @lemm.ee - 12mon
I’m in NC. The radio pundits during the runup to the General Assembly’s lottery vote were about the potential revenues being around $300 million. Further discussion was how that was the total budget for Forsyth County (Winston-Salem vicinity) schools. NC has 100 counties, some smaller, some larger, and for the GA to vote for it was viewed by the pundits as a really dumb thing.
The very thing of it becoming a replacement rather than a supplement to the school budgets was obvious to anyone who knows American (and especially NC) politics.
2
Pika - 12mon
It's even more insane when you realize that lottery tickets are basically double taxing, because you already pay the sales tax when you purchase the ticket so not only are you getting taxed on the purchase of the ticket but you're also getting taxed on the winnings, so essentially they're getting double the tax per ticket
3
Chev - 12mon
Or the winning amount should represent the money you get after tax just like in every other country.
13
Ultraviolet @lemmy.world - 12mon
The stated jackpot isn't just before tax, it's the future amount that it would be worth after collecting interest for 30 years.
2
TriflingToad @sh.itjust.works - 12mon
I personally think the tickets should be hella taxed, not the winnings. However lotteries are immoral ASF anyways and should probably be banned so 🤷♀️
Should have bought the ticket in the Cayman Islands.
11
Peppycito @sh.itjust.works - 12mon
Or Canada.
3
Uriel238 [all pronouns] - 12mon
Best. Billionaire. Ever.
10
Th4tGuyII - 12mon
I'm sure if I was the lottery winner I'd be salty in this scenario, but you only get half as a lump sum anyway, and having $1 billion taxed at roughly half is probably how it should be.
The thing that makes it painful is as OP said, all billionaires should be getting taxed like this, not just that one who can't exploit tax loopholes.
8
finitebanjo @lemmy.world - 12mon
OH NO! Only $424M USD?! How will he get by?
8
Kbobabob @lemmy.world - 12mon
Good job to missing the fucking point
35
Suburbanl3g3nd @lemmings.world - 12mon
Technically, he isn't getting taxed like a billionaire either. He's being taxed like a lottery winner who took the lump sum. That's how lottery taxing works. Bro will be a billionaire and avoiding taxes easily with some financial planning
3
finitebanjo @lemmy.world - 12mon
Talking about the guy who does get taxed doesn't really help us tax the rich, so I see your missing-point and I raise you one Whoosh.
3
frayedpickles @lemmy.cafe - 12mon
Would you consider going back to reddit?
4
finitebanjo @lemmy.world - 12mon
Lol gottem, gj mate.
If you don't like it here then go start your own instance with hookers and blackjack.
3
frayedpickles @lemmy.cafe - 12mon
What the actual fuck is wrong with your brain?
2
DontRedditMyLemmy @lemmy.world - 12mon
You're both trolls, stop that!
2
frayedpickles @lemmy.cafe - 12mon
By your definition the entirety of Lemmy is just trolls, which makes it a useless term
1
DicJacobus @lemmy.world - 12mon
idk what's worse. the punchline of this joke, with pre-existing elites not being taxed, or the fact that someone could look at recieving 420 million, and find an excuse to get mad about it
7
DrSteveBrule @mander.xyz - 12mon
No one is mad about getting 420million. We're mad that there are billionaires.
16
Blackout - 12mon
I can tell you what I would do with $424m, disappear. I'd still do good with most of it but I'm going to leave human society and go join a herd of elephants.
nifty in 196
Lotterule
80% taxes how does that work?
suddenly germany feels like a tax haven :D
It doesn't. Just headline gore.
Lottery payouts typically have two options: lump sum at half the value of the winnings or a 30 year annuity at the full value. So this headline assumes lump sum reward and cuts the face value on that alone, then does a bunch of other hand waving to get you down the next 58%.
News journals that are owned/advertised by anti-tax republicans love to run out the "lottery was taxed too high" story, specifically targeting people who fancy themselves future lottery winners. It's all bullshit.
That's insane. In Europe when you'd win 1 billion € you get 1 billion €, no taxes, no lump sum reward.
Its a moot point because you're never going to win the lottery.
Are the lotteries state owned? In Quebec, that's why lotteries is not taxed. State lottery is a voluntary taxes in a itself
Lotteries historically were setup as a fundraising efforts by governments, hence taxing lottery winnings
It's not taxes... well not all of it. The lotto advertises its prize as the sum total of a 30 year annuity. Currently Powerball has an estimated Jackpot of 163 Million. You can take the lump sum up front though. At present that lump sum is 73.9 million. After you get that, then you get taxed on it, reducing it to probably something like 40-50 million.
That seems incredibly scammy to me. They're pretending the prize is double what it actually is and then claim even more of that back as taxes. If the actual prize money is only 20% of what you're advertising that's dishonest at best.
Where I am lottery winnings are tax-free and without an insane hidden 50% "claimed your winnings" fee. What they advertise is what you get if you win.
Of course it does, it's the lottery
A lottery isn't necessarily inherently a scam, at least no more than gambling is in general. In practice the odds of winning are pretty poor compared to alternatives but as long as they're up front about the odds of winning I wouldn't call that a scam. Eg, this lottery lists the odds of winning each prize, though it would definitely be better if they published those on the main page rather than in the terms. A fairer lottery is possible pretty easily by adjusting the prize values, range of numbers to select, or how many numbers the gambler selects. This would kind of defeat the purpose of most lotteries to raise money for government, but personally I'm for more progressive taxes anyway.
Advertising one prize when the real prize is significantly lower is just lying and not an inherent trait of lotteries.
On one hand, it does feel a bit scammy. On the other, I'm not gonna lose a lot of sleep if I only took home 50 million dollars from a 150 million jackpot. It's still a "Work? Sorry, I'm unfamiliar with peasant slang." amount of cash.
You're walking down the street and see a sign in a new sandwich place saying they have a three-for-one deal on, buy any one sandwich and get two sandwiches completely free. Sounds like a great deal, it might be a bit much but you skipped breakfast today and you can always keep one for later anyway, right? So you head inside and think about what you want, maybe you're cutting back on red meat and you're tired of chicken so you go with a tuna or cheese sandwich. You get to the counter to pick up your tuna+cheese sandwich, the worker hands over your two freebies and you walk out. Turns out you're hungrier than you thought so you practically inhale your tuna+cheese, barely savouring the flavour. You reach for your second sandwich but when you unwrap it you discover it's not the same as the one you ordered; it's bread with a thin smear of butter, technically it is a sandwich but it's definitely not what you wanted or expected when you ordered.
Did you get scammed? Are you okay with that since you still got one sandwich even though you chose that vendor because they advertised three?
It really shouldn't be a controversial statement to say that lying to people to get their money is wrong. If it really makes no difference as you're suggesting why can't they just advertise the real value instead?
Not gonna read that incredibly tortured analogy. I hope you took it out back and shot it after you did those awful longwinded things to it though.
They do note the lump non-annuity value. The numbers I pulled were off the powerball website and were right next to each other. Different states (and even municipalities possibly.) tax differently (not at all in some cases), so its not as if they can give a solid number there.
Okay, I'll simplify. Store advertises three sandwich. You buy three sandwich. You get one sandwich. Store says fees+taxes ate other sandwiches. You say it's fine, you got sandwich. I say it's not, store lied.
They absolutely can give a solid number even when a lottery runs in areas with different taxes, they simply choose not to because they make more money that way and for some reason you lack regulation there. See for instance here where the prize money may be partially subjected to income tax, meaning tax varies wildly depending on the winner's other income:
So there's three obvious choices: mislead customers, calculate the correct prize after relevant taxes and advertise that, or give a fixed value and eat the cost of any taxes themselves. They chose the first one.
The US doesn't advertise taxes included generally whereas other countries do. Americans don't expect tax to be included on any price or income advertised. There are people who say we should change that, but we're stuck in the 1800's in so many ways.
They should hold onto the lottery ticket and borrow against its value.
Instead of taking out the lump sum, you can have it paid in installments, they probably asked for lump sum, thus they get a much lower value.
Then you can do the math of whether or not it's worth it to receive monthly payment or taking out the lump sum, paying off all your debts, then putting it into S&P 500 and drawing down 4% a year and never run out of money.
At 400 million, that's what, 16 million a year? Never have to work again a day in their life, can spend 365 days a week in a 5- star hotel at a 1000-2000 dollar a night a 250 thousand car every year and haven't even spent 1/16 of his yearly liquidation.
Thanks for your comment. People keep forgetting that even a couple of million would be enough for you to never work a single day in your life and have a nice middle class life. 400m is just the equivalent of 200 "comfortable middle class lives, forever"
We don't forget that, the comments are pointing to the fact that any rich person that got 2 billion through investments would end up paying less, no one is saying that 400 millions are not enough.
Such a joke. While I personally believe everyone should pay their fair share... Winning lotto or winning at the casino ect, should not be taxed.
However if you use that money and make more money with it you should be properly taxed.
I think if they only advertised the post-tax number, there wouldn't really be a problem. Like, "hey, the jackpot is some amount, and after tax you could win 400 million"—that would be fine. As it is, they're kinda just building resentment for taxes in general by making your final winnings seem so disappointing, even though it's still 400 million.
It's always on the consumer to pay all taxes for some reason. Even with sales tax. I didn't make a sale why am I the one paying the tax?
Hey, now. We don’t want to charge business taxes! That’s anti-business! We’re anti- people in this country. Businesses are tax exempt because they’re the real citizens. Those gross, floppy pEoPlE are what we use to make money for businesses!
God, I hate sales tax. "This thing is $1.99? No it isn't."
But the amount is also variable as it's not a lump sum..
If you take lump sum and not the 30 year annuity, you take about a 50% hair cut off the prize money alone.
Hmm...
I mean, they could advertise the 30-year annuity as a separate number, then. There are still ways to make this work. I'm just saying, not framing taxes as if they were a punishment would make the whole thing much less annoying.
Not taxing the winnings at all, or just taxing them before they get into the pot, might be the easiest solution, I guess. My only contention with that is, well, now we're just edging into the fact that I don't really like lotteries. Certainly not on this scale.
And its not like it is business profit, unless you can put the tickets you buy as business expenses. To me, it is in the same category as gifts. Should not be taxed.
I violently disagree with you.
Gambling and playing lottery is a method to take a risk and get essentially free money by doing nothing, other than taking the risk. Personally I think anything like this gambling related should be taxed up the wazoo. Definitely more than 50%. And that taxed amount should ideally go back to fund things like schools and stuff good for everyone.
Final note, if you ain't happy with 400M free money, you cray cray.
In my country the lottery is taxed at the collection step, so the money divided and advertised is already after taxes. I think that makes more sense, you collect the money and the law specifically distributes this taxed money for specific budgets and the winnings advertised are the real one.
The US effectively does both: the lotteries are run by the states and total prizes are much less than total ticket sales, generating net revenue for the state. Winnings are taxed like other income, meaning there are federal taxes and in many states state taxes.
The whole system gets even worse when you look at it. They prop it up as an "education lottery", "This will help finance our schools!" In reality, they supplement education funding. I.E. they remove 2mil from state funding and put 2 mil in from the jackpot. They will continue lowering educational spending and use the assets in other areas they want.
non-instructional support personnel, you know the over inflated administration that plagues education, now being supported by a lottery. Like most legislation, it started as something grand but slowly got mutilated till it's a net-negative effect.
I’m in NC. The radio pundits during the runup to the General Assembly’s lottery vote were about the potential revenues being around $300 million. Further discussion was how that was the total budget for Forsyth County (Winston-Salem vicinity) schools. NC has 100 counties, some smaller, some larger, and for the GA to vote for it was viewed by the pundits as a really dumb thing.
The very thing of it becoming a replacement rather than a supplement to the school budgets was obvious to anyone who knows American (and especially NC) politics.
It's even more insane when you realize that lottery tickets are basically double taxing, because you already pay the sales tax when you purchase the ticket so not only are you getting taxed on the purchase of the ticket but you're also getting taxed on the winnings, so essentially they're getting double the tax per ticket
Or the winning amount should represent the money you get after tax just like in every other country.
The stated jackpot isn't just before tax, it's the future amount that it would be worth after collecting interest for 30 years.
I personally think the tickets should be hella taxed, not the winnings. However lotteries are immoral ASF anyways and should probably be banned so 🤷♀️
Why does he look like lil bow wow
https://lemmy.world/pictrs/image/324d0979-4185-4963-aab6-413c80926484.gif
Because Bow Wow was in a movie called Lottery Ticket.
Should have bought the ticket in the Cayman Islands.
Or Canada.
Best. Billionaire. Ever.
I'm sure if I was the lottery winner I'd be salty in this scenario, but you only get half as a lump sum anyway, and having $1 billion taxed at roughly half is probably how it should be.
The thing that makes it painful is as OP said, all billionaires should be getting taxed like this, not just that one who can't exploit tax loopholes.
OH NO! Only $424M USD?! How will he get by?
Good job to missing the fucking point
Technically, he isn't getting taxed like a billionaire either. He's being taxed like a lottery winner who took the lump sum. That's how lottery taxing works. Bro will be a billionaire and avoiding taxes easily with some financial planning
Talking about the guy who does get taxed doesn't really help us tax the rich, so I see your missing-point and I raise you one Whoosh.
Would you consider going back to reddit?
Lol gottem, gj mate.
If you don't like it here then go start your own instance with hookers and blackjack.
What the actual fuck is wrong with your brain?
You're both trolls, stop that!
By your definition the entirety of Lemmy is just trolls, which makes it a useless term
idk what's worse. the punchline of this joke, with pre-existing elites not being taxed, or the fact that someone could look at recieving 420 million, and find an excuse to get mad about it
No one is mad about getting 420million. We're mad that there are billionaires.
I can tell you what I would do with $424m, disappear. I'd still do good with most of it but I'm going to leave human society and go join a herd of elephants.