This is missing the entire point.

When lottery winnings are considered, the person questioned thinks about herself. When millionaires are considered, those are those nasty other people who must have gotten it unfairly, and they should have it taken away from them by the POTUS. That was demonstrated by cheers just yesterday.

Never underestimate the power of envy.

I've never bought a lottery ticket.

Do you pay sales tax on the ticket?

Anyway, it's a damn lottery, I say the tax rate should be zero, and I'm typically a bloody bleeding heart liberal.

Take the ticket abroad before you claim it, then call it 'overseas income' so you don't have to pay as much on it.
It works for corporations, why shouldn't it work for the little people?
Honestly, tax the shit out of it. Is there that big a difference for an average income person between 1 million or 1.5 million?

I don't know if taxing the rich is really all about envy. Personally, when I think about rich people today I have a strong suspicion that they aren't usually rich solely through hard work; but rather, were given advantages because their parents were rich (call this the "Harvard network effect"), or have somehow benefited from lobbying loopholes or special provisions in the law that are written to benefit already-rich people, not help people get rich. If the government were a lot smaller and more transparent, I think suspicions about how people got rich would lessen considerably and less people would be in favor of a higher tax burden on rich people.

@Jennifer

Strong suspicions with absence objectively verifiable facts are not any basis for tax law.

Also, if you win the lottery and become wealthy, and you use your wealth to leave your children better off than you are, that really isn't anyone else's business, not matter what "strong suspicions" they have about your children.

Sounds a lot like envy to me. "They didn't work as hard, they got lucky, i didn't. Wait, let's not use the word envy, lets use the word "suspicious." Sounds less jealous."

Interesting, when I fantasize about winning the lottery, I always assume I pay 1/3 to 2/3 in taxes. I also assume that's what I'll pay on any inheritances or other windfalls.

That's strange though, because I was paying around 25% on a 40k or so teacher's salary... who the hell pays only 15% in America?

"I don't know if taxing the rich is really all about envy."

But it is, exactly, all about envy.

That is how it's allowed. Politicians use envy to assert their power over people who have worked hard by engendering envy in those who have less than others who have more. It is the vehicle they use to accomplish the unconstitutional/ amoral theft of another persons income. They do it because they are cheating the system - they avoid having to work hard and still have a means to "create wealth" at the expense of everyone else. They use it to legitimitize the theft of anothers property.

See "Evil Eye" in many, many, many, cultures throughout history. Warnings against the threats of envy can be seen in many of them. It's one of the 10 Commandments.

In Italian Culture people wear an amulet called "Il Corno" to ward off the evil eye or the evious eye of others for just this purpose. Say what you will about silly folklore, but Envy is a dangerous part of the human condition which has been manipulated throughout history to allow a small minority (and their syndicates driven by envy) to assert power over the productive class.

> who the hell pays only 15% in America?

Mitt Romney

Lottery is a one time thing, usually. Then they are back where they started soon with a huge house they can't sell or afford the taxes and insurance for.
Might as well soak them while you can.

I am a right wing nut, and I say the lottery winnings should be subject to zero tax. Even the ever greedy State of California does not tax Callotto winnings. The state lotteries already take their cut of the income from lottery sales before payouts . The Feds don't need to tax the net winnings anymore than they tax interest on muni bonds. Eliminate all taxes on state lottery winnings and watch the sales soar! That's a great way to get back some of the welfare money!

Part of the problem I feel is how tax rates are considered.

consider the following:
Joe works at a job and make $1000 (Joe has lots of other income so Joe's tax rate is 35%)
Mitt invests in a company some of his money with such that it produces a $1000 of profit (the company does well as does Mitt so their tax rates are 35% and 15%).

Joe's company deducts the money paid to Joe as an expense and so it is not taxed. Of $1000 "earned" by Joe, Joe takes home $650. 350/1000 = 35% which is Joe's tax rate.
Mitt's $1000 cannot be deducted so the company has to pay 35% tax on that. So $650 goes to Mitt but he then has to pay 15% on that. Mitt takes home 552.5 of the $1000 he earned. 447.5/1000= ~45% yet it is said Mitt's tax rate is 15%

Now let's say Joe decides to invest his income and gets an amazing return of 10% ($65) on which he pays 15% so he takes home 55.25$...however if there had been no tax just would have had $1100 (1000*110%) instead of 705.15...how should we consider that?

Max:  Big companies are making obscene profits. Those lucky bastards should be paying their windfall profits back into the government, to help me.

Fred:  Yeah, and let's get back more money from those lucky bastard lottery winners, and from top athletes, and movie stars, and popular writers, and super models.

Max:  Uh, I don't think you see the point.

Fred:  I thought the point was that no one should be lucky.

-- --
Hating Lottery Winners
Why should businessmen be disliked and pay high taxes because their success is partly luck, while all-luck lottery winners are accepted as deserving their winnings?

who the hell pays only 15% in America?

Hi.

www.irs.gov/pub/irs-pdf/i1040tt.pdf

Now, if you're not talking purely federal taxes, but in general, well, I also live in a state with no income tax, only consumption taxes. And we don't have sales tax on food items. So I have a certain amount of control over what I pay.

> Do you pay sales tax on the ticket?

After you win, loses are deductible.

In Australia, NewZealand and most other western nations, the ONLY tax you pay on lottery wins is that which you ahve to pay on the interest earned.

ie: you win $1 to [place any amount here] you pay no tax

Once you place any of that amount in the bank (and for lotteries you actually receive all the amount in one lump sum.. not over a period) you only pay standard income tax on the interest because interest is classed as earnings.

Basically all lotteries, which are a tax on people bad at probability anyway ;) , are calssified as a gift for any winnings.

The USA is one of the only countries where the USG gets paid for your good luck .

It always seems nuts to me.

To Jennifer:
They are interesting "feelings" that are more based in political slogans than in facts.
Since I posted in response to a similar on a few months ago I'll do it again. Most people stop listening when they hear statistics so instead lets take apart the histories of the Forbes top 10 as examples of who and how people get rich in America. All are famous and have bios and personal histories on line and easily verified.
Your points are: 1. " their parents were rich "
and 2. " not through hard work"
Well number 2 is a complete judgement call as to what someone defines as hard work. Most upper management puts in 60-80 hour work weeks, but usually don't lift anything heavy or sweat a lot.
As to number 1 lets explore the top 10. It works best in grouping them.
#1 and number 3 Gates (Windows) and Ellison (Oracle). Both computer inventors and company founders. Neither were rich, both were middle class.
#4 and 5 the Koch brothers, PHD from MIT (trust me a difficult thing to get. inventors of various chemical techniques including fertilizer and oil refinery.Father, did have money but would be considered upper middle class, not rich. and certainaly not ultra rich.

6,9 and 10, the Walton Kids- (Walmart owners) (good night John boy), Were they born in riches? Nope, Though their money is mostly inherited, their father founded and made a fortune during the kids lives, they were born poor, or middle class.

#8. Adelson- making casinos and resorts. Son of Jewish immigrants in the 1940s? Family wealth ?? lets say probably poverty, or middle class.

#7. Soros- made his money mainly through currency manipulation, hedge funds, and pushing papers around, changing laws and politics to suit him. yep he would be the posterboy for bending laws to benifit yourself. He is however the darling of the left and even though of all on the list he is the epitomy of what they complain about he gets away smelling like a rose. Also son of Jewish immigrants in WW2. Family wealth??

#2 Buffett- got his money through various invertments- came from poverty.

So we have in answer to #1 " their parents were rich " eh the waltons later in life would be a yes. early in life a no. others no. So by far the majority were not rich.

#2. worked hard. too subjective of a question. I would consider getting good grades at MIT to be very hard, others wouldn't.

"1 million or 1.5 million"

What's the real difference in making $10,000 or $15,000 a year? Let's whack 50% off your pay-there's no real difference!

I'm orettys ure here in TX winers lose a good third. I don't know if that's state or federal. I'd tax them half, personally. But I am against income tax in general, and most taxes. Even half is a ton more money that they didn't have yesterday and wouldn've made in their lives.

Hahaha, what a *telling* poll! But I'll bet a lot of people did't even realize that prizes are taxable income in the first place.

Me, I would be grateful enough that the IRS skims its take off the top at the outset, so I wouldn't have to worry about it later.

"I'd tax them half, personally. But I am against income tax in general, and most taxes. "

??????

"Me, I would be grateful enough that the IRS skims its take off the top at the outset, so I wouldn't have to worry about it later."

Habituation.....(sigh).

feebs, it's a lottery. People stupid enough to play should not complain about the gov't getting a cut. They take a cut in Vegas, too.

Taxing income one worked for and supports one's family with is something else altogether. I am for a consumption tax. A LOW one that can never be raised, at least not without amending the constitution.

I'm also against corporate taxes. And property taxes. And any number of others.

"Tax the rich" is usually a ploy to get votes through envy. That said, the government is seldom more productive with the money than "the rich" are, unless it is using the money to erode our freedoms.

If the guv'ment were to double taxes on Bill Gates, he's get buy just fine with the millions he had left. It is all the people who would lose their jobs with his diminished capacity to pay them that would suffer.

I know several states don't charge STATE income tax on lottery winnings, provided the winner lives in the state. The states make so much on the losers, it rather seems fair the winner's needn't pay.

I ever go back to the question, why should a rich person pay a higher PERCENTAGE of tax? Certainly they should pay more money - a person making a million dollars should pay ten time more than a person making 100,000. But why should they pay MORE than that?

I get it - all the dodges and shelters the rich have access to, they can end up paying much less than their base tax rate. And that's "unfair", as they have ways to reduce their tax that the plebes don't.

If you raise the tax rate, and don't get rid of the loopholes (or ever better, add more), little changes, except the plebes THINK it's become more fair.