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How the $500 million Powerball lottery is a tax on the poor
The Week ^ | November 28, 2012 | Ryu Spaeth

Posted on 11/29/2012 8:11:47 AM PST by ExxonPatrolUs

[Households that earn at most $13,000 a year spend 9 percent of their money on lottery tickets. ]

With the Powerball lottery jackpot reaching a record $500 million, people from around the country are flocking to local convenience stores to try their luck. The majority of those standing in line for tickets and joining office pools are likely not habitual lottery devotees, but rather casual players who decided to get in on the fun once the media reported the unprecedented size of the pot. However, the everyday lottery business is a much grimmer affair, relying overwhelmingly on "poverty, habit, and desperation," says Natasha Lennard at Salon:

Studies of lottery ticket sales in North Carolina, South Carolina, California, Texas and Connecticut found that per capita lottery sales are consistently higher in the poorest counties and tickets are more likely to be purchased by unemployed individuals.

Statistics from South Carolina highlight the lottery’s reliance on low earners: people in households earning under $40,000 made up 54 percent of frequent players, while constituting only 28 percent of the state’s population. Meanwhile, a PBS report earlier this year showed that, for America’s very poorest, the lottery is a heavy expenditure: Households that earn at most $13,000 a year spend 9 percent of their money on lottery tickets.

“Lotteries set off a vicious cycle that not only exploits low-income individuals’ desires to escape poverty but also directly prevents them from improving upon their financial situations,” a 2008 study by Carnegie Mellon’s Tepper School of Business noted. The study, aligning with national statistics, found that people who felt poor were found to buy double the number of lottery tickets. 

One of the main justifications behind lotteries is that the government — at both the state and federal levels — pockets a portion of the jackpot to finance education programs and the like. Consequently, the lottery has often been compared to a regressive tax, one that costs the poor more proportionately than it does the rich. The obvious counterpoint is that, unlike a tax, the decision to buy a lottery ticket is entirely voluntary — no one is holding a gun to your head. Still, critics say, the lottery is undeniably in large part funded by the poor, who are more susceptible to the jackpot's promise of lavish riches.


TOPICS: Chit/Chat
KEYWORDS: lottery; poor; powerball; tax
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1 posted on 11/29/2012 8:11:58 AM PST by ExxonPatrolUs
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To: ExxonPatrolUs
"Households that earn at most $13,000 a year spend 9 percent of their money on lottery tickets."

It's a better investment for them than buying insurance.

2 posted on 11/29/2012 8:15:05 AM PST by Paladin2
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To: ExxonPatrolUs

The lottery is a regressive tax on mathematical skills.


3 posted on 11/29/2012 8:16:44 AM PST by ZirconEncrustedTweezers (Democrats are evil. Republicans are stupid.)
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To: ExxonPatrolUs

All these lotteries are viewed by the ‘masses’ as their IRA of choice. Just another stop on the road to perdition.


4 posted on 11/29/2012 8:17:15 AM PST by shove_it (the 0bama regime are the people Ayn Rand warned us about)
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To: Paladin2

Of course, households that earn at most $13,000 a year also receive something like $60,000 in various welfare benefits a year, so they tend to have more disposable income than many of the rest of us.

And it is not a TAX, no one is making anyone buy lottery tickets.


5 posted on 11/29/2012 8:18:04 AM PST by NEMDF
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To: ExxonPatrolUs

This is ridiculous.

Do we or do we not have a choice not to pay tax (and taxes)?

Your Honor, I rest my case.


6 posted on 11/29/2012 8:19:32 AM PST by Sir Napsalot (Pravda + Useful Idiots = CCCP; JournOList + Useful Idiots = DopeyChangey!)
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To: ExxonPatrolUs
Two bucks?

OMG!

Why, that could have bought a pack of cigarettes, or a gallon of gas, or lunch, or a pound of hamburger or a loaf of...nevermind, none of that....

But it buys a shot at a half billion dollars?

What's a mutha to do?

Of course poor people will take a shot.

7 posted on 11/29/2012 8:19:44 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: ExxonPatrolUs

Likely it is a tax on whoever buys a chance. It gives the buyer a masochistic form of entertainment. It is, however, voluntary.


8 posted on 11/29/2012 8:20:51 AM PST by JimSEA
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To: ExxonPatrolUs

When the lottery hits $100M or more, I buy a few tickets. I don’t expect to win, but it’s a nice little dream. And it comes out of beer money.
I don’t think people should be spending hundreds on it, but if they want to throw that much away in 1 fell swoop, OK by me. Unless it’s welfare money meant to help feed their kids... THEN it isn’t.


9 posted on 11/29/2012 8:21:34 AM PST by theDentist (FUBO; qwerty ergo typo : i type, therefore i misspelll)
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To: ExxonPatrolUs

It always cracks me up when liberals write this kind of hand-wringing drivel. It’s like all they can do to not just come right out and “explain” that the poor are simply really freaking stupid.


10 posted on 11/29/2012 8:25:32 AM PST by Lancey Howard
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To: ExxonPatrolUs
Good!

If people are too stupid to realize all their "freebies" aren't so free, so be it.

11 posted on 11/29/2012 8:26:26 AM PST by Texas Eagle (1)
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To: Sir Napsalot; ExxonPatrolUs

Just wait till Obama forces WHOSEEEVER running the scheme to give out FREE lottery tickets to ‘the poor’.

Yeah, that’ll solve the problem!!! (heavy sarc)


12 posted on 11/29/2012 8:27:46 AM PST by Sir Napsalot (Pravda + Useful Idiots = CCCP; JournOList + Useful Idiots = DopeyChangey!)
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Comment #13 Removed by Moderator

To: ExxonPatrolUs

Things that are voluntary aren’t a tax. It’s unfortunate that the people that can least afford to waste their money are the ones more likely to waste it on the lottery, but that kind of decision making is a large part of why they’re poor. There’s plenty of other stuff they can’t afford but buy anyway.


14 posted on 11/29/2012 8:28:33 AM PST by discostu (Not a part of anyone's well oiled machine.)
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To: Sir Napsalot
Just wait till Obama forces WHOSEEEVER running the scheme to give out FREE lottery tickets to ‘the poor’.

Actually, the correct method would be to pass edicts to force the winners to share the money with those less fortunate. It is more dependable than simply giving away free tickets.

The giving away of free tickets is the level at which geitner and bernanke operate.

15 posted on 11/29/2012 8:31:47 AM PST by going hot (Happiness is a momma deuce)
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To: ExxonPatrolUs

Just did a quick calculation... The 2Brains household spends 1/3 of 1% of it’s pretax dollars on the lottery. Even that’s too much, of course, but what can I say? I’m weak.


16 posted on 11/29/2012 8:31:49 AM PST by Doctor 2Brains
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To: ZirconEncrustedTweezers
The lottery is a regressive tax on mathematical skills.

Somebody said that the lottery is a tax on stupidity,

17 posted on 11/29/2012 8:35:17 AM PST by oldbrowser (Put Obama in check, now.)
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To: ExxonPatrolUs
Still, critics say, the lottery is undeniably in large part funded by the poor, who are more susceptible to the jackpot's promise of lavish riches.

Well, daggone it... personal responsibility would go a long way toward...

Oh, never mind...

18 posted on 11/29/2012 8:36:15 AM PST by ScottinVA (I've never been more disgusted with American voters.)
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To: ExxonPatrolUs
I bought a ticket...Then read tickets were selling at 130,000 per minute.

Oh if only...In the blink of an eye I would transform from a working stiff to a professional gentleman of leisure. I'd be a man of qualitay.

That is until the gov claimed it for redistributive purposes.

19 posted on 11/29/2012 8:36:42 AM PST by Wyrd bi ful ard (Gone Galt, 11/07/12)
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To: ExxonPatrolUs

20 posted on 11/29/2012 8:43:14 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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