Taxes on the Lottery Jackpot

lottery jackpot

The lottery is a very popular game, but it can be an income drain for some players. Among lottery participants, most come from lower socioeconomic levels. According to a Gallup study, the average jackpot winner makes between $36,000 and $89,999 each year. But winning a huge jackpot can be even worse. Besides the obvious temptation to spend the money on lavish living, you’ll have to pay taxes. Federal tax rates are around 25 percent of the prize, while state taxes can be as high as 8.82%.

Hitting the Lottery Jackpot is a critique of the state’s dependency on lotteries. Author David Nibert emphasizes the conflicted role of the state as a gambling promoter. TV stations, advertising agencies, and ticket vendors benefit from lotteries, and fewer than half of the money won by players is returned as prizes. The book also makes the case for lotteries as a pernicious government tax.

Hitting the Lottery Jackpot is a critique of the state’s reliance on lotteries. In it, Nibert highlights the conflicting role of the state as gambling promoter. The state benefits from the lottery’s advertisements and promotions. Ticket vendors and advertising agencies also make money off of the lotteries. More than half of the wagers are not returned as prizes, and those who are low-income and of color are more likely to lose money playing lotteries.