Too poor to pay taxes, but not too poor to play the lottery

[Pangloss]

http://consumerist.com/2010/05/poor-people-spend-9-of-income-on-lottery-tickets.html

 

A recent study found that poor folks - households earning under $13,000 per year - spend about 9% of all their income on lottery tickets.

 

So... why do we exempt them from paying taxes, exactly?

[bascule]

It would appear that they are in fact paying a "bad math" tax

[ydoaPs]

It would appear that they are in fact paying a "bad math" tax

 

Iirc, lottery profits go to education funds, so this(facetious as it may be) is somewhat accurate.

 

 

edit:_____________________________________

[jackson33]

Pangloss, It's kind of hard to imagine any 'Household' living on $13,000, however I am sure any hope of working their way out of what must be pure poverty, is limited. Then I don't know how much is net loss on that suggested $1,000 expense, but the dreaming of someday hitting the big one may be beneficial in a psychological way, otherwise called entertainment.

 

So... why do we exempt them from paying taxes, exactly? [/Quote]

 

Well, we don't exempt them from paying taxes and take the household figure on up to the poverty level, somewhere around $28,000 or less per household. They pay all the same State/local taxes anyone else does, directly or indirectly. Sales taxes and the like directly along with the many excise taxes (gas/tobacco/alcohol/permits). Where ever they live someone is paying school taxes, property taxes for that property and their rent money is used to pay. Percentage wise, I'd think, even with out buying lottery tickets, the percentages that end up paying taxes, exceeds most all other income brackets.

[Pangloss]

Well and therein lies the lottery rationale, because I don't suppose if we were to re-impose the income tax on that income level it would stop them from playing the lottery.

 

I'm just astounded that they can find $1,000 to spend on the lottery in the first place. Perhaps this says something about where we might find some room to cut back on social services.

[timo]

A household with income under $13,000 spends, on average, $645 a year on lottery tickets, or about 9 percent of all income.

Perhaps the 9% figure comes from a lottery participant. Or "all income" is different from income. I don't get the numbers.

EDIT: Oh wait, I get it: The average income under $13000 is about $7000.

Edited May 29, 2010 by timo

[John Cuthber]

Lotteries were always a tax on poor people; if you are already a millionaire, you don't buy tickets.

[jackson33]

Well and therein lies the lottery rationale, because I don't suppose if we were to re-impose the income tax on that income level it would stop them from playing the lottery. [/Quote]

 

OK, Pangloss, lets put this into some kind of perspective; The lowest percentage of income demographics are both house holds under 10K$ (5%) and those that participate (9.7%), however the uneducated and low income (28K$) DO spend more, percentage wise. To answer my own question, there is about a 50% return on tickets sold, so those that are SAID to spend 9%, should net out (on average) 4.5% actual loss.

 

To emphasize another earlier point, that income say at 10K$, was TAXED 14.2% ($1,420.00), generally half paid by the employer and employee, from the first dollar. Nothing classified benefits, can be used to purchase lottery tickets, any more than they can be used to attend a professional baseball came, a movie, the theater or any other form of entertainment.

 

Household income under $10,000 9.7% 5.0%

Per capita spending is higher for those respondents who did not complete high school and for low-income households.

 

NORC respondents did not have overly rosy views about payout and win rates. Most (63%) thought that lotteries paid out less than 25% of total sales as prizes. (The actual payout percentage is around 50%.) The vast majority (86%) of those who had played the lottery during the previous year indicated that they had lost more money than they had won. Only 8% of respondents believed that they had made money playing the lottery. [/Quote]

 

Read more: Lotteries - Lottery Player Demographics http://www.libraryindex.com/pages/1605/Lotteries-LOTTERY-PLAYER-DEMOGRAPHICS.html#ixzz0pKUHuG2Q

 

I'm just astounded that they can find $1,000 to spend on the lottery in the first place. Perhaps this says something about where we might find some room to cut back on social services. [/Quote]

 

It's difficult to argue these points, but your blaming the person, when it's the source you need to question. I don't recall a big outcry from the so called poor (1945-1965), as social justice under government began its stroll into society (1965). Folks dealing with financial problems have always had places/sources where they could go for assistance. Church and civic organizations, seemed to be doing a great job, long before Government started making these decisions, in many places even advertising for people to join their various programs, establishing what qualifies for assistance. In fact TODAY, many of the cultures that live in the US, do NOT request or accept any or very little Federal assistance. I doubt you'll find many Hindu, Muslim, Asian or many of the various religious sects, involved and suggest the Amish accept NONE, it's a cultural thing introduced, promoted and implemented into the society IMO for other than benevolent reasons.

 

 

By the way, I receive 1300.00 a month as a SS benefit, long ago passing whatever I could have contributed, self proclaimed now a welfare check. My personal idiosyncrasies are at least a six pack per night and I do smoke cigarettes, a carton per week. Most 'Joe Six Packs' would pay 100.00 per week 400.00 per month (31%) I buy 30 packs (same net tax as a six pack and foreign smokes (Canadian generics) for less than half that, would this give you a problem. Oh yes, I also play Texas Holdem on line, 10 cent tournaments (360 seat). I may spend a 1.00 per day, but over the past 6 years have spent probably $50.00 net...