Mega Meeeeeeeellions up to $355MM. Time to pay the stupid tax!

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Ninjahedge

Diamond Member
Mar 2, 2005
4,149
1
91
MB, so lemme get this strait.

For a jackpot that people have paid in $753,400,000, you will be "awarded" $335M, you need to pay a "penalty" for taking it out all at once (Say, 80% of full value?) and then pay 50% in taxes.

So $335M -> $134M in pocket.

$619M goes away. Nice.

I know that half of the value of the original is directly slated for things like education, but being taxed on something like this is just horrible.

Every dollar that went in there was taxed to start with AND half of it was taken in the first place!

The $$ the government gets from this is so small compared to what is needed, but yet no politician has taken this up as a possible winning strategy for election. The net effect for making these municipal lotteries tax-free would be minimal, but people would think the guy was God (even though most would never see a penny from it).

I hate the Lottery system... :p
 

mb

Lifer
Jun 27, 2004
10,233
2
71
MB, so lemme get this strait.

For a jackpot that people have paid in $753,400,000, you will be "awarded" $355M, you need to pay a "penalty" for taking it out all at once (Say, 80% of full value?) and then pay 50% in taxes.

So $355M -> $134M in pocket.

$619M goes away. Nice.

I know that half of the value of the original is directly slated for things like education, but being taxed on something like this is just horrible.

Every dollar that went in there was taxed to start with AND half of it was taken in the first place!

The $$ the government gets from this is so small compared to what is needed, but yet no politician has taken this up as a possible winning strategy for election. The net effect for making these municipal lotteries tax-free would be minimal, but people would think the guy was God (even though most would never see a penny from it).

I hate the Lottery system... :p
One thing you're forgetting about is all the non-jackpot payments they have to make each time. For example the non-jackpot winnings yesterday totaled $45M. The one before that was $20M.

I don't know all of the details though. I know if you really want to learn how it works all of the information is publicly available.

Also there is no sales tax on lotto tickets.. I'm not sure if that's what you were getting at when you said "Every dollar that went in there was taxed to start with"
 

shocksyde

Diamond Member
Jun 16, 2001
5,539
0
0
Wow, the final payout amount was upped AGAIN to $380MM.

That's some impressive shit right there.
 

JEDI

Lifer
Sep 25, 2001
29,391
2,736
126
I don't think you understand how the lottery works. The jackpot doesn't reset every time. If no one hits the jackpot it keeps going higher. And #s are only valid 1 time only.

But yes there were 229,421,186 picks sold for the $355M drawing.

Here's the progression:

Date...............Sales................Jackpot (millions)
1/4/2011........$229,421,186.........$355
12/31/2010.....$121,535,218.........$242
12/28/2010.....$57,470,434..........$200
12/24/2010.....$55,640,233..........$168
12/21/2010.....$42,033,969.......... $145
12/17/2010.....$37,827,825.......... $123
12/14/2010.....$31,269,168........... $104
12/10/2010.....$26,710,064 .......... $88
12/7/2010.......$23,220,936........... $74
12/3/2010.......$23,046,641........... $62
11/30/2010.... $19,803,778............. $52
11/26/2010.....$17,471,759............ $42
11/23/2010.....$18,086,478 .............$34
11/19/2010.....$18,590,582 ............ $25
11/16/2010.....$16,597,993............ $16
11/12/2010.....$17,689,735 ........... $12

HUGE spike when the jackpot is near $250M.
and SUPER huge when $300M+
 

mb

Lifer
Jun 27, 2004
10,233
2
71
HUGE spike when the jackpot is near $250M.
and SUPER huge when $300M+
Yeah it's actually the largest (unadjusted) ticket sale for the history of MM, although for the last couple years they've been in a lot more states than when it started.

The second highest was on 3/6/2007. $212,819,366 worth of tickets were sold for a $370M jackpot.
Hmm on 08/28/09 with a jackpot of $333M sales were "only" $155,945,116.


It's actually quite interesting. I've never looked at the data before today.
 
Last edited:

Svnla

Lifer
Nov 10, 2003
17,986
1,388
126
HUGE spike when the jackpot is near $250M.
and SUPER huge when $300M+

No kidding.

I was at a small town East Texas Exxon gas station right after work yesterday around 5:30 p.m. central time and the parking lot was jam packed. The line inside the store was around the store and all the way to the front door. Vehicles with license plates from Louisiana, Texas, Arkansas, and everything in between were all over the place. Not only a lot of people were buying but they bought a lot more of tickets. One older guy bought a whole stack of tickets, I were guessing in the hundreds of dollars at least. The girl that ran the lottery machine did not stop, she was very good and efficient.

I did not get out of the place until 6:30 p.m.
 

rcpratt

Lifer
Jul 2, 2009
10,433
110
116
I don't think you understand how the lottery works. The jackpot doesn't reset every time. If no one hits the jackpot it keeps going higher. And #s are only valid 1 time only.
I don't think you know how to read - I never said the jackpot resets every drawing, nor did I say the tickets are valid for more than one drawing.
 

rcpratt

Lifer
Jul 2, 2009
10,433
110
116
MB, so lemme get this strait.

For a jackpot that people have paid in $753,400,000, you will be "awarded" $335M, you need to pay a "penalty" for taking it out all at once (Say, 80% of full value?) and then pay 50% in taxes.

So $335M -> $134M in pocket.

$619M goes away. Nice.

I know that half of the value of the original is directly slated for things like education, but being taxed on something like this is just horrible.

Every dollar that went in there was taxed to start with AND half of it was taken in the first place!

The $$ the government gets from this is so small compared to what is needed, but yet no politician has taken this up as a possible winning strategy for election. The net effect for making these municipal lotteries tax-free would be minimal, but people would think the guy was God (even though most would never see a penny from it).

I hate the Lottery system... :p
Nobody pays any penalty. The jackpot that is advertised is based on a 26-year annuity. The actual cash jackpot was ~$220M-whatever (too lazy to check). You're thinking of it the wrong way - ~$220M isn't penalized down from $355M, but rather $355 is calculated based on interest and the ACTUAL jackpot - ~$220M.

And yes, the point of the jackpot is to make money mostly education. And not for the people that buy the tickets, mostly education. Obviously.
 

mb

Lifer
Jun 27, 2004
10,233
2
71
I don't think you know how to read - I never said the jackpot resets every drawing, nor did I say the tickets are valid for more than one drawing.
No need to be an asshole about a misunderstanding when I'm trying to help :rolleyes:
 

L00PY

Golden Member
Sep 14, 2001
1,101
0
0
If there was some way to be sure the plot isn't split, the expected value of $1 is about $1.60 (after taxes in my state), not bad at all. Except that it then goes below $1 if the pot is split, and with this many people playing, it seems highly likely.
You may want to double check your math. There's a federal tax of 25% on the jackpot, the expected value was probably under $1.30.
 

Ninjahedge

Diamond Member
Mar 2, 2005
4,149
1
91
One thing you're forgetting about is all the non-jackpot payments they have to make each time. For example the non-jackpot winnings yesterday totaled $45M. The one before that was $20M.

I don't know all of the details though. I know if you really want to learn how it works all of the information is publicly available.

Also there is no sales tax on lotto tickets.. I'm not sure if that's what you were getting at when you said "Every dollar that went in there was taxed to start with"

2 things, when you are talking about $45M in comparison to a $355M "jackpot", it really does not add much to the final tally.

That is only 6% of the total funds involved, so I did not bother adding it up.... (lazy).

The second thing is, how do you get paid? You know that that dollar you have in your hand is a post-tax dollar, right? You were paid something like $1.50 (depending on what you earn, etc etc) to get that $1.

So, lets be conservative and call it $1.40 for every dollar in your pocket, than equates to $1.05B pre-tax earnings were spent on this jackpot. :(

But my point was not that. What I was saying is that if every dollar that is spent on this has already had a chunk taken out for Federal, State and other taxes, SS, and things, why do they tax the winnings as well? Isn't that double dipping?
 

shocksyde

Diamond Member
Jun 16, 2001
5,539
0
0
But my point was not that. What I was saying is that if every dollar that is spent on this has already had a chunk taken out for Federal, State and other taxes, SS, and things, why do they tax the winnings as well? Isn't that double dipping?

Even worse, if you invest your winnings, don't you have to pay taxes on capital gains? I may be wrong, don't know much about the subject.

The triple-dip!
 

Ninjahedge

Diamond Member
Mar 2, 2005
4,149
1
91
Nobody pays any penalty. The jackpot that is advertised is based on a 26-year annuity. The actual cash jackpot was ~$220M-whatever (too lazy to check). You're thinking of it the wrong way - ~$220M isn't penalized down from $355M, but rather $355 is calculated based on interest and the ACTUAL jackpot - ~$220M.

And yes, the point of the jackpot is to make money mostly education. And not for the people that buy the tickets, mostly education. Obviously.

rc, I am quite aware of that.

But how many people see "$355M!!!!" as "$355M annuity over 20 years with an initial startup payment of $xx"?

If the money is already there. Already paid in full and available for immediate payout, why do they need to adjust it as an annuity? Because they want to make the number seem bigger?

Maybe there should be another rule, that you can only advertise what you will ACTUALLY win, not what you will win over 20 years. The big number should be the one-time payout cost, not the annuity.

Back to my post though. What I am saying is simple. The lottery is a money soaker. It is one more way to get cash out of the middle and lower class. (There aren't many rich folks going in buying stacks of tickets like that old man did in Svnla's post.).

I do not mind a huge chunk being spent on Education, but when you add up all the numbers and see how little money actually gets back into the hands of those playing, it gets depressing.
 

Ninjahedge

Diamond Member
Mar 2, 2005
4,149
1
91
Even worse, if you invest your winnings, don't you have to pay taxes on capital gains? I may be wrong, don't know much about the subject.

The triple-dip!

Yep.

But I can see that happening. If you win money and make more money off of it, it is additional income, so you really should pay taxes on it.

You pay less taxes than someone earning that amount of money (depending on how much it is). Capital Gains is 15% max I believe....... (Which explains all the stock bonuses that executives get in lieu of salary.....)
 

chalmers

Platinum Member
Mar 14, 2008
2,565
0
76
Even worse, if you invest your winnings, don't you have to pay taxes on capital gains? I may be wrong, don't know much about the subject.

The triple-dip!

You would, but only when you sell the asset (stock/bond).
 

shocksyde

Diamond Member
Jun 16, 2001
5,539
0
0
You would, but only when you sell the asset (stock/bond).

I would love to know the final "value" of your initial earned dollar in the triple-dip situation.

Hell, let's go for the quadruple-dip!

When you die, and leave your fortune to someone else, there's an "estate tax," correct?

Yeeeeehaw!
 

Ninjahedge

Diamond Member
Mar 2, 2005
4,149
1
91
The Estate tax is such a crock.

They should just tax any outright sale of any vestment. If Jr. is given the house and the stock, so long as he does not SELL the house, it should be taxed just like a second abode (or 3rd, or 4th, as the case may be).

If he does not sell Daddy's stock, it stays there earning cash. And any cash that changes hands? C'mahn!

This ain't a recurring event here. This will happen only once or twice in most cases. We do not need something like this that takes in so little cash (and just makes Daddy divest years before his death... The "family company" would be one example)
 

Svnla

Lifer
Nov 10, 2003
17,986
1,388
126
So Washington state does not have an income state tax. What if a person that living in another state <with income tax> and bought a winning ticket in Washington state, that person still have to pay income tax to his state from the winning ticket, right?