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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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To: oldbrowser

“Somebody said that the lottery is a tax on stupidity,”

Yes, that too.


21 posted on 11/29/2012 8:43:27 AM PST by ZirconEncrustedTweezers (Democrats are evil. Republicans are stupid.)
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To: Responsibility2nd
I love PBS

 

22 posted on 11/29/2012 8:45:06 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: ExxonPatrolUs

My favorite are the idiots that were complaining about “Bush’s high gas prices” as the drop a $20 on scratch offs. I called many of them morons to their faces and just got blank stares in return.

The stats in the article are also the reason why bankruptcies are extremely frequent with lottery winners. Poor people do things that keep them poor, rich people do things that make them rich.

Being broke is a temporary economic situation, being poor is a state of mind. Good thing we are governing in a manner that creates more poor thinkers.


23 posted on 11/29/2012 8:54:51 AM PST by CSM (Keeper of the Dave Ramsey Ping list. FReepmail me if you want your beeber stuned.)
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To: ExxonPatrolUs

I could not disagree more with this article. Nothing paid voluntarily, for whatever reason, can be a tax. Whether spending money on lottery tickets is wise makes for a fair argument, but to suggest it is a tax (because the poor are too stupid to think for themselves, or elect not to?) is to redefine a well-understood word.


24 posted on 11/29/2012 9:05:06 AM PST by NCLaw441
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To: ExxonPatrolUs

if it’s a tax, then it’s a tax on the willing. the unwilling don’t have to play...


25 posted on 11/29/2012 9:13:44 AM PST by camle (keep an open mind and someone will fill it full of something for you)
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To: ExxonPatrolUs
Legalizing lotteries was sold in my state as benefiting the children. I do not recall what percent was to go to education but now at least the poor contribute to the education system without any long arm of government taking it.
26 posted on 11/29/2012 9:23:47 AM PST by Just mythoughts
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To: Smokin' Joe
Two bucks?

Yea I bought 4 tickets last night thinking it was going to be $4. Apparently they raised the math tax last year sometime. I don't play enough to know that. So I got dinged on my not paying attention taxes.

If I would have known I would have only bought 2 tickets.

27 posted on 11/29/2012 9:24:55 AM PST by Domandred (Fdisk, format, and reinstall the entire .gov system.)
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To: theDentist
"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."

I think I've bought four lottery tickets in my life, and it's been years since my last one. You are correct that you get a lot of dreams for your dollar, simply musing about winning, but I think for me, it was an even healthier endeavor.

Thinking about what I would do with the money forced me to really take a long hard look at my values and priorities and those persons and causes I hold most dear. In doing so, I also concluded that the odds of winning are so infinitesimally small that if God truly intended for me to win, He would give me a clear sign; hence, until and unless I get such a sign to play, I won't.

28 posted on 11/29/2012 9:28:58 AM PST by Joe 6-pack (Que me amat, amet et canem meum)
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To: Domandred

I bought 1 ticket. With the PowerPlay option, that was $3. I gave her a five, but the gat at the counter gave me only a dollar in change. When I challenged her, she said she though I’d gotten two tickets. I had to show her my ticket to get my full change back. I may be math challenged, but I know how to make change!


29 posted on 11/29/2012 9:30:06 AM PST by knittnmom (Save the earth! It's the only planet with chocolate!)
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To: going hot

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.

I posted a twitter saying that.

Funny, we haven’t heard the tee vee people bring this up with all of their brilliance!!


30 posted on 11/29/2012 9:35:13 AM PST by conservcalgal (Dear Lord, please bless our nation and those who have stepped up to serve our nation with honor.....)
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To: Responsibility2nd

Love, love, love that cartoon. :)


31 posted on 11/29/2012 9:35:44 AM PST by JCBreckenridge (They may take our lives... but they'll never take our FREEDOM!)
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To: Paladin2

Powerball play? It’s a SNAP with your EBT card.


32 posted on 11/29/2012 9:38:41 AM PST by fella ("As it was before Noah, so shall it be again,")
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To: ExxonPatrolUs

It’s not a tax at all - free people freely choose to buy lottery tickets or they don’t.

Oh, and show me a household that “earns” less than $13,000 a year but doesn’t get at least that amount or more in tax-free taxpayer-funded government assistance and I’ll show you some beautiful swampland for sale in Florida.


33 posted on 11/29/2012 9:38:46 AM PST by meyer (Proud member of the 53%.)
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To: ksen

Go post that commie crap somewhere else, lib.


34 posted on 11/29/2012 9:40:21 AM PST by safeasthebanks ("The most rewarding part, was when he gave me my money!" - Dr. Nick)
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To: ExxonPatrolUs
It isn't FAIR that the poor have to buy lottery tickets. The goober-mint should provide them as an entitlement.

;^)

It won't be long before someone comes up with this.
35 posted on 11/29/2012 9:47:37 AM PST by jrg
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To: ExxonPatrolUs

Seen on a bumper sticker some years back:

“The Lottery: A Tax on People Who Are Bad at Math”


36 posted on 11/29/2012 9:48:23 AM PST by Darnright ("I don't trust liberals, I trust conservatives." - Lucius Annaeus Seneca)
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To: ExxonPatrolUs

States should allow people to use federal benefits- like food stamps- to buy tickets.

It’s a 50% profit for the state!


37 posted on 11/29/2012 9:51:51 AM PST by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat Party!)
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To: safeasthebanks

trickle down economics is now commie crap?

:unsure:


38 posted on 11/29/2012 9:56:52 AM PST by ksen
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To: NCLaw441

I could not disagree more with this article. Nothing paid voluntarily, for whatever reason, can be a tax. Whether spending money on lottery tickets is wise makes for a fair argument, but to suggest it is a tax (because the poor are too stupid to think for themselves, or elect not to?) is to redefine a well-understood word.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Tax Schmax. It’s wealth redistribution. There’s a million different ways the gubmint gets their hands in your pockets.

I’m on record for stating we need to tax the poor. And I mean severly. It’s a well known economic principle that if you want LESS of something, then tax MORE of it.

Tax the rich? Sure. Look at how that’s working out. I say we tax the poor. Start with ending the billions of dollars we throw at welfare and entitlement programs.

Redistribute that money back to the Makers who paid it and watch and see how fast our economy turns around.


39 posted on 11/29/2012 10:13:32 AM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: ExxonPatrolUs

Anyone who purchases a lottery ticket should have to forfeit any government assistance he’s receiving. If someone has enough money to piss away on lottery tickets, then he doesn’t need any of my hard-earned tax dollars to keep him from starving.


40 posted on 11/29/2012 10:23:13 AM PST by kevao (Hey, Obama: The 1930s called, they want their economic policy back.)
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To: ksen

You didn’t intend it that way, but this cartoon clearly mocks trickle-down economics by showing the rich guy upset that ‘lucky duck’ got a whole dollar, used to buy bargain food, out of the thousands the rich guy spent on luxuries.

A more accurate cartoon would be ‘lucky duck’ now working a full time job since ‘rich guy’ spent his $. An even better one would be to show the cyclical prosperity by having ‘lucky duck’ now able to buy a new car from Mr. richguy’s company.


41 posted on 11/29/2012 10:25:14 AM PST by No.6 (www.fourthfightergroup.com)
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To: ExxonPatrolUs

My father calls the lotery the poor mans tax.


42 posted on 11/29/2012 10:28:34 AM PST by Phlap (REDNECK@LIBARTS.EDU)
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To: Paladin2

I can honestly say I lost a lot more in the stock market than I ever lost playing any lottery. Actually, I think I’m ahead on the lottery; only play when it’s over $2M, 3-4 times a year, and won a couple hundred once.


43 posted on 11/29/2012 10:36:55 AM PST by WinMod70
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To: ExxonPatrolUs

Think of all the “goods” you could buy with tha money and how many jobs you might spawn.


44 posted on 11/29/2012 10:40:11 AM PST by Sacajaweau
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Gambling: average payoff is negative.
Investing: average payoff is positive.


45 posted on 11/29/2012 10:42:06 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: Joe 6-pack; theDentist

“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.”

I found a $5 bill on the ground years ago.
I keep it in my wallet, thinking about ways to turn that $5 into a business.
It’s a nice little dream, one much more viable than giving it away in hopes the government might lavish riches on me in return.


46 posted on 11/29/2012 10:52:53 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: No.6
You didn’t intend it that way

Actually, I did intend it that way. ;)

47 posted on 11/29/2012 11:18:07 AM PST by ksen
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To: ksen
No, but this bogus critique of it - which you well know that cartoon really is - is commie crap. You know, like the stuff in your brain, lib.

Why do you libs always have to lie? Why? You know, don't bother answering. I already know the answer and don't feel like (nor will I) read anything else you post here.

48 posted on 11/29/2012 12:32:27 PM PST by safeasthebanks ("The most rewarding part, was when he gave me my money!" - Dr. Nick)
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To: Paladin2

apparently they can afford to play the lottery.

they get more back from government than 1300 bucks anyway.


49 posted on 11/29/2012 12:56:01 PM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: discostu

playing the lottery is voluntary,.......for now.


50 posted on 11/29/2012 12:58:48 PM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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