Taxing

Every time there’s some kind of big Mega Millions or Powerball jackpot or whatever, you see articles about how much you’ll pay in taxes and there’s this low-level outrage about “Uncle Sam taking a big bite out in taxes” and would-be billionaires become Patrick Henry waving a Gadsden flag and getting indignant about paying taxes they’d never even feel on an unfathomable amount of money that they did nothing to earn.

Consider this: If you actually win that $1.6 billion by yourself, “After the 24 percent federal take, the average annuity payment comes out to $40,533,333 per year for 30 years equaling around $1,215,999,990, while the lump sum total comes out to $687,724,000, per USA Mega.”

So after taxes, you’d still get a lump sum of $687 million. Yet it still seems like there’s this weird undercurrent of “What a ripoff! You’re paying so much in taxes! And then state taxes: UGH!” Even if you take the annuity and do the bare minimum, parking it in a savings account and never touching the principal, at 1 percent interest, you’d still get $405,000 a year to live on. Isn’t that enough? Even if my math is off (likely), you still have so much money that it wouldn’t matter. It’s a rounding error. It’s one fewer fainting couch on your yacht.

I realize potential lottery winners complaining about taxes are doing it in a tongue in cheek way, but that’s also the vein in which I’m writing this. I love money but seriously, why shouldn’t Mega Millions winners have to pay taxes? It’s not like “Uncle Sam took my hard-earned money!” You didn’t earn anything. You went to the gas station, recited some numbers and they picked your numbers out of a hat. Just pay your taxes. Life is rough.

Recently I read someone who believes the people are better at spending their own money than the government. I disagree. Have you met people? Most of us are not good at spending what we have. Any brief glance at the history of lottery winners spending their cash will prove that. So many people do dumb things and piss it all away.

People not spending their money wisely is pretty much why the state has lotteries to begin with. Buying a few tickets every month is harmless fun, and I’m not trying to make fun of that, but there was some guy on the news this morning who spent $1,500 on tickets. There are people who spend those mass amounts all the time and that’s a pretty good argument in favor of a progressive tax system for winners.

The irony of lottery players complaining about paying taxes and having Them give your money to other people is that’s basically what the Mega Millions is, only you’re doing it voluntarily. That $1,500 in tickets is going right to someone else.

Or maybe I’m just a humorless crank whose dreams are boring and practical. I’m fun at parties, I swear.