Posted 4/04/12 (Wed)
By Neal A. Shipman
Well, there is one thing that I know for sure this week. And that is I’m not going to have to wonder or worry about how I could have spent my winnings in the $640 million “Mega Millions” lottery. I’m not going to have to worry about whether or not I want to splurge on a mansion on some remote island, buy a couple of flashy sports cars for me and my better half, or pay off my kids’ students loans. And for that matter, I don’t have to worry about how much of my winnings I’m going to donate to the church or other worthy causes or to members of my family.
And since I didn’t win, I’m not going to have to move out of town to avoid people who suddenly think I should give them money simply because I now have it and they don’t. Nor am I going to have to disconnect my phone to avoid the rush of financial advisors who think that they know what I should be doing with those hundreds of millions of dollars. Likewise, since I didn’t win, I can keep my current mailbox because it won’t be flooded with mail soliciting donations.
But unlike the millions of others who fell victim to “lottery mania” and bought tickets for their chance to become instant millionaires, I kept my money safely in my pocket. Call me a skeptic, but I guess I just didn’t believe that I was going to defy the odds and be the lucky winner. And with the odds of winning the big payoff of $640 million pegged at 175 million to one for each ticket that you bought, it is surprising how many people dashed off to buy lottery tickets.
Granted, it is human nature to believe that someone is going to finally win the lottery. So the natural assumption is that since someone is going to win, if you buy a ticket, or several tickets, the chance is the winner could be “me.” And that is the attraction of lotteries. You don’t have to invest a lot of money for a chance to win a lot. You just have to be willing to divert a portion of your hard-earned money from things such as clothing, food, gas or something else into a ticket that more than likely will bring you absolutely nothing in return except for some intrinsic pleasure.
So while millions of people willingly line up to buy lottery tickets for their chance to win big, but usually come up empty-handed, who is always the big winner in these lotteries?
The answer is the government. Granted, ultimately there is always an individual or group of individuals who will walk away with a ton of money by playing the lottery. The real big winner is the IRS and individual states. No matter how big or small the lottery payout is, the IRS is going to collect around 35 percent of the winnings. And depending upon which state you reside in, you could be seeing a state tax of up to 10 percent taken away from your winnings before you see one thin dime of your winnings. And all of those taxes are not chump change.
But hey, if you won $460 million and only spent a few bucks on lottery tickets, who cares about how much you have to pay in taxes. You are money ahead. Right?
And that is why some people are so willing to keep on buying those tickets.
Blame it on my parents’ upbringing, but I can’t do that. For me, if I have some extra money that is burning a hole in my pocket, I’ll put it in the offering plate at church or donate it to a local charity.