~mystic_fish
@~mystic_fish
19 Years1,000+ Posts
Comments: 37 · Posts: 4746 · Topics: 283
Lottery winnings..
They're taxed alright .. 29%
There's one in my state, and it just boggles my mind with this. Supposedly, this money (4% ) of the winnings are going to the school system, yet, our schools continue to suffer financially. Departments get cut, never enough money for supplies and equipment.
Where exactly is this money going?
The governement gets 25% .. and that's a lot of frigging money, isn't it? On a 300 million winning, that's 75 million .. where the hell is it going?
To cash-out, such as the winner you read about means .. the opt to take half the jackpot in one lump sum (less 29% ), instead of taking the full amount in annuities (less taxes) over 26 years.
There's one in my state, and it just boggles my mind with this. Supposedly, this money (4% ) of the winnings are going to the school system, yet, our schools continue to suffer financially. Departments get cut, never enough money for supplies and equipment.
Where exactly is this money going?
The governement gets 25% .. and that's a lot of frigging money, isn't it? On a 300 million winning, that's 75 million .. where the hell is it going?
To cash-out, such as the winner you read about means .. the opt to take half the jackpot in one lump sum (less 29% ), instead of taking the full amount in annuities (less taxes) over 26 years.
"The governement gets 25% .. and that's a lot of frigging money, isn't it?"
wow, sure is P-Angel, that's way too much! ..thought it was like 10% or something.
..okay, why if the ticket is given to you as a gift..? is it still considered income? how does the gov get around that one? lol some fancy internal rhetoric i'm betting..! lol
thanks for the info, guys..🙂
wow, sure is P-Angel, that's way too much! ..thought it was like 10% or something.
..okay, why if the ticket is given to you as a gift..? is it still considered income? how does the gov get around that one? lol some fancy internal rhetoric i'm betting..! lol
thanks for the info, guys..🙂
Mystic .. here's how it works ..
Gift tax refers to a transfer of estate (fixed or liquid) BEFORE death to avoid the high rate on Estate Tax. In order for a Gift Tax to qualify, it has to be inclusive of an estate.
To give somebody as a gift, an expensive item (including cash) is called Luxury Tax.
With the Lottery the tax is called Gambling Tax, which benefits the government and is BIG BUSINESS .. in many ways, they benefit from this.
Cash-Out
1) They still get their cut of the full dollar amount (the whole jackpot, eventhough you elect to recieve half - less taxes)
2) The other half of the jackpot goes into an interest-bearing account (though the principal goes back into the lottery pool, the government has sole interest in the gain *not the winner*)
Annuity
1) Naturally, the government would rather you take in a payment plan, since the annual amount to be paid to winner is only 50 grand for each million in the jackpot .. the other 95% of the winnings waiting to be distributed .. again, sits in an interest-bearing account for government gain. Think about that .. 95% of the 300 mil winning, had they elected for the annuity is a whopping 285 mil, just at 4% interest, that's over 11 mil a year .. plus, it's compounded.
In either way that a person elects to recieve their winnings .. the main reason why this is such a big-business is because it is what's called a Regressive Tax, which means it reduces the tax incident of people with higher incomes, and puts the poor in a higher tax bracket .. and the lottery's are prodomantely played by the poor-man.
The rich gamble in Casino's (to the rich's tax benefit), because the maxium tax rate is 6% (it used to be, I think it still is). In Casino's, winnings don't fall under the Gambling Tax rule, since it's a regressive tax, and this kind of tax's purpose is to target the poor.
Crazy, huh?
Yep, that's our government for you.
Also, a lottery win, say in Canada for example, by an American .. is still fully taxable to us (federal and state of residence). Furthermore, states hold the right to tax you independently of each other. For example: I buy a ticket in Maryland, yet, live in Virginia .. yep, I pay tax to both states (excluding a state inclusive of a multi-state pool), which qualifies under the Gambling Tax rules .. whereas, with an income tax, I can only be taxed by one state, even if I work in one and live in the other.
Gift tax refers to a transfer of estate (fixed or liquid) BEFORE death to avoid the high rate on Estate Tax. In order for a Gift Tax to qualify, it has to be inclusive of an estate.
To give somebody as a gift, an expensive item (including cash) is called Luxury Tax.
With the Lottery the tax is called Gambling Tax, which benefits the government and is BIG BUSINESS .. in many ways, they benefit from this.
Cash-Out
1) They still get their cut of the full dollar amount (the whole jackpot, eventhough you elect to recieve half - less taxes)
2) The other half of the jackpot goes into an interest-bearing account (though the principal goes back into the lottery pool, the government has sole interest in the gain *not the winner*)
Annuity
1) Naturally, the government would rather you take in a payment plan, since the annual amount to be paid to winner is only 50 grand for each million in the jackpot .. the other 95% of the winnings waiting to be distributed .. again, sits in an interest-bearing account for government gain. Think about that .. 95% of the 300 mil winning, had they elected for the annuity is a whopping 285 mil, just at 4% interest, that's over 11 mil a year .. plus, it's compounded.
In either way that a person elects to recieve their winnings .. the main reason why this is such a big-business is because it is what's called a Regressive Tax, which means it reduces the tax incident of people with higher incomes, and puts the poor in a higher tax bracket .. and the lottery's are prodomantely played by the poor-man.
The rich gamble in Casino's (to the rich's tax benefit), because the maxium tax rate is 6% (it used to be, I think it still is). In Casino's, winnings don't fall under the Gambling Tax rule, since it's a regressive tax, and this kind of tax's purpose is to target the poor.
Crazy, huh?
Yep, that's our government for you.
Also, a lottery win, say in Canada for example, by an American .. is still fully taxable to us (federal and state of residence). Furthermore, states hold the right to tax you independently of each other. For example: I buy a ticket in Maryland, yet, live in Virginia .. yep, I pay tax to both states (excluding a state inclusive of a multi-state pool), which qualifies under the Gambling Tax rules .. whereas, with an income tax, I can only be taxed by one state, even if I work in one and live in the other.
Our government has their greedy hands in any/all pockets pickable ..
Double taxation is what gripes me to no end .. for example, shareholders recieve dividends that incur a liability, yet, the coporation who is paying out the dividend to its holders already paid tax on the earnings, since corps are seperate entities.
That's crapola ..
Double taxation is what gripes me to no end .. for example, shareholders recieve dividends that incur a liability, yet, the coporation who is paying out the dividend to its holders already paid tax on the earnings, since corps are seperate entities.
That's crapola ..
"Also, a lottery win, say in Canada for example, by an American .. is still fully taxable to us (federal and state of residence)."
wow that's something, and to think the Romans were the very first to even create taxation. Then of course the war tax, which i believe was supposed to be temporary til wars end..
although, i have a feeling taxation would have been discovered anyway..LOL
Thanks again for all the extra info P-Angel, was very informative..! 🙂
wow that's something, and to think the Romans were the very first to even create taxation. Then of course the war tax, which i believe was supposed to be temporary til wars end..
although, i have a feeling taxation would have been discovered anyway..LOL
Thanks again for all the extra info P-Angel, was very informative..! 🙂
You're welcome, mystic 🙂
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