Musings

Wednesday, October 04, 2006

Lottery

While partially listening to the radio the other day, the words "... the lottery is the only tax the poor pay," caught my attention and it was explained that the buying of lottery tickets is primarily done by the poor. Jerry Schocken is not poor but he only buys a ticket when the amount is over thirty million, he buys one for one dollar. I was with him one day while he bought a ticket and he persuaded me to buy one. It was only the second ticket I had ever bought a lottery ticket. I recieved a slip of paper and never looked at it again. (I do not get a newspaper to check out numbers.) Jerry does check the paper. He jokes that he would like to win the lottery "one more time." Is it true that the lottery is a tax? As I recall, the Florida lottery was supposed to give funds to education but that does not stop the politicians from increasing, each year, the amount of the budget going to education. Could it be true the lottery was instituted to get the poor to pay taxes?

posted by Marcel at 11:42 AM

14 Comments:

  • Sounds like a plot to me. As taxes are paid on the winnings, I don't doubt that the education system gets some of it; but why would they cut back on education taxes when we ALL pay for them, when some is good more is better!

    By Blogger Monica, at 3:24 PM  

  • When the State of Michigan first proposed a lottery I was in favor. I even circulated a petition dedicated to putting the proposition on the ballot. I took the petition up and down Navy and other streets in the neighborhood. (By the way, Marcel, Mr. Ramus said to tell you Hello.) The alternative for raising money for education was going to be a 1% raise in property taxes.

    It started out at a $1.00 ticket with a drawing once a week. Since the property tax raise would have cost me about $50.00 I felt justified in buying a ticket every week as my contribution to education. I can't believe the slippery slope that brought it to the point it is today and can just wonder what it will be in the future. I am also one of those people that will buy a ticket if the prize reaches astronomical proportions, but not if I have to leave the house or cross the street to do it.

    I am still in favor of the $1.00 ticket with a drawing once a week and all the profits going to education. Who knew? I wonder if I should go back and apologize to all those people who signed my petition.

    By Blogger paulette, at 7:24 AM  

  • With that whole long comment above I realize that I didn't address your question about the lottery being instituted to get the poor to pay taxes. I don't think of the lottery as a tax. I think it was instituted to separate a fool from his money.

    By Blogger paulette, at 7:28 AM  

  • A common phrase describing a lottery is that it is "a tax for people who are bad at math."

    People who do not understand the astronomical odds against winning continuously plunk money down week after week.

    The same people complain when the price of cigarettes, beer, and gas go up. But they willingly give their money to the lottery because of the hope of getting a huge return.

    Much better to use their lottery money on cigarettes, beer, and gas.

    By Blogger Tim B., at 11:32 AM  

  • I think I'll put my dollar per week in my million dollar fund. I may get rich quicker than playing the lottery.

    I think yes, it is a way to get poor people and apartment dwellers to pay taxes.

    Cheryl

    By Blogger cheryl, at 6:07 PM  

  • Well, Lyle (who is exceptionally good at math and writes papers on probability theory) will play the lottery ($1) when the prize is at a certain level. He explained to me that someone worked out the mathematics and at a certain level (I think above $100 million) it is statistically worth the $1 if you don't have to cross the street or stand in line.

    I personally have not bought a lottery ticket in 20 years, but I do pay into a pool here at work. But that is mostly because I don't want to be left behind if they all leave.

    Is it a tax on the poor of the country? Of a sort. I am sure there are studies showing that the majority of lottery players are poor. But it is an equal opportunity exploiter since they got your dollar and they got mine. Of course, you never picked up your grand prize so they really lucked out on your dollar.

    By Blogger EZ Travel, at 8:09 AM  

  • I too am in favor of the "education" lottery. Tennessee got one just a few years ago, and it has been doing a lot of good. The proceeds go to fund college scholarships, and I think some of it goes back to the elementary, middle, and high schools too. Some might ask how you know this is actually going on, but I can tell you from first-hand experience. I was offered a lottery scholarship (I think it was around $3-4000), but only if I attended a school in the state of Tennessee. Since I came here (Ohio) I had to turn that scholarship down. If, however, I ever want to go back to Tennessee for college (or even a graduate/medical school) I can always reapply and get some money.

    Personally, I have only bought a ticket once. It was actually a couple days after my 18th birthday. I suppose if it reaches "astronomical" numbers, I will buy another one, but I would have to travel into Kentucky to play Powerball (I think Ohio has Mega Millions).

    Here's an issue for you. The state of Ohio wants to start a program with state-run slot machines. 100% of these proceeds would go to college scholarships (the commercials say almost $1 billion a year...which is misleading when it's only really $800 million...big difference there!). What do you think about that?

    By Blogger Sean M., at 12:31 PM  

  • Hold on a sec...

    Are you saying that your chances of picking the correct 6 numbers increases when the prize reaches a certain level?

    No way.

    Let's say that there are 50 possible numbers and you must choose the 6 correct ones. Your chance of getting the first one is 1 in 50. The second 1 in 49. etc.
    You MULTIPLY those (1/50 x 1/49 x 1/48 x 1/47 x 1/46 x 1/45) to get your odds. That formula does not change regardless of the money.
    By the way that is 1 in 11,441,304,000.

    Anyone saying that your odds improve when the money goes up didn't do the math, and the math doesn't change.

    Now, if you play all 11.4 billion possibilities your odds dramatically improve. But you'll probably only break even. :-)

    By Blogger Tim B., at 12:55 PM  

  • You are absolutely right your chances are always the same, just like flipping a coin. Even if it comes up heads 10 times in a row the chances of it coming up heads on the next throw is always going to be 50%.

    But when there is money at stake the bigger prize makes it worth the minimal ($1) risk.

    By Blogger EZ Travel, at 1:09 PM  

  • All this math stuff is beyond me. I understand the odds of winning are great and that is good enough for me. My lottery contributions are probably as much as Bill Gates. (Do you think he ever bought a ticket? Even in the office pool?) If Ohio decides to go the route that Sean indicated, are they trying to get the poor to pay for "education?" Is this a hidden conspiracy by the rich?

    By Blogger Marcel, at 2:08 PM  

  • The hidden factor in the lottery large prize is that more people play making your chance of winning alone less. I, however, have a sure fire play that mathematically assures you of winning more.

    The trick with the schools has been the same going back to the beginning in New Hampshire. Yes, the lottery money goes to schools, but the money that had gone to these same schools from the general fund is decreased. Take smoke, add mirrors…….

    By Blogger marty, at 3:48 PM  

  • Marty has hit the nail on the head with the statement that legislatures give less money to schools and give it to other programs out of the general fund. It is in this sense that a lottery is a tax on poor people, the money merely offsets what a legislature would have had to give to support schools.

    By Blogger Marcel, at 6:22 PM  

  • When are we going to hear from you again? It's been almost a month since your last post.

    By Blogger Sean M., at 4:52 PM  

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