If 40 cents of every dollar spent on power ball lottery's goes to the government, why does the US gov't tax the winnings of the lottery? Here there is no tax on winning a lottery.


2 Answers

Walt O'Reagun Profile
Walt O'Reagun answered

Because the government wants all the money it can get.

Tax on winnings = income tax

The money from purchase of a ticket = stupidity tax

PJ Stein Profile
PJ Stein answered

40 cents of every dollar does not go to the government. A portion of the money goes to the company that runs the lottery. (Which by the way is not an American company, but an Italian one.) Then there is the cost of the machines, their upkeep, and some goes to the retailers that sell the tickets. Once it is all said and done, on average each state that participates gets about 11 cents per dollar and the federal government gets none of that. Of the 11 cents that goes to a state, it depends on how the state has chosen to spend that money on where it goes. My state, Florida, puts it towards education. Other states puts it towards social services.

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Maurice Korvo
Maurice Korvo commented
here is a breakdown of the Florida lottery dollar

Here is a breakdown of the Lottery dollar:
•Prizes: 63.4%
•Education: 28.2%
•Retailer Commissions: 5.5%
•Ticket Vendor Fees: 1.5%
•Operations: 1.4%

says nothing about an Italian company.

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