Sunday, August 28, 2016

Powerball: A Tax on the Poor


It was all over the news. The Powerball jackpot had risen to over $900 Million. You couldn't escape it. I didn't play, nobody I knew played, but we all knew what the jackpot was. Someone, somewhere, told us. It was on TV, people were talking about it at work, it was on the radio, and every gas station window had a sign. Despite my attempts to remain woefully ignorant of the potential spoils of this glorified numbers racket, I was almost forcefully informed. I could not avoid it. The big question? "Who was going to win?"

The number and the question had become ubiquitous. News of government corruption, wars, just plain current events, and your average person is blissfully unaware of the details. However, this number, everyone had heard of and knew. It almost makes you wonder that if we treated knowledge as a prize, if people would be far better educated. However, the question on everyone's lips was eventually answered. Who would win? Nobody, that's who.

There was no Powerball winner after a huge buying frenzy with some people frantically buying a hundred or more tickets at a time. The government was pulling in money hand over fist as hundreds of millions of tickets printed out on cheap paper with pink ink. Now, with nothing delivered, the jackpot stood at $1.3 BILLION, and a new round of buying started as people spent even more money for their 0.0000000034% chance at being rich. The bigger question, though, was how many times could they get away with having no winner, selecting the exact numbers that hundreds of millions of "random" tickets didn't manage to cover, before people stopped buying tickets?   It's a balancing act the lottery commission has mastered over time, and whether it's truly random or less so, to them, it's just another tax. It is, simply, just a tax on the poor.

Here's a breakdown as to which taxes affect each "class" of Americans the most, based on total financial impact.

Rich - Capital Gains tax, Estate tax, and Property tax
Middle Class - Income tax, Sales tax, and Property Tax
Poor - Lottery, Traffic Citations, Gas tax, Registration, Licensing, Sin tax (alcohol and cigarette tax)

If you'll notice, the rich are taxed on what they already have and what they earn based on what they already have. The middle class are taxed on their attempts to gain what the rich have, and the poor, since they have no property and no real means of ever obtaining any, are taxed on their habits, mobility, and dreams. They are, essentially, taxed for simply being alive.

It's very medieval if you think about it. The old lords in Medieval Europe didn't want their peasants moving around and having too much fun either, lest they should become unruly and start thinking they deserve more out of life, so they tied them to the land using economic manipulation, fealty ties, and religious obligations. Now, the taxes that affect the poor the most are the ones based on ideas of getting rich (face it, the lottery's an idea, not a chance), aka, things they self-medicate with because they can't afford real healthcare and their means of transportation.

The upper echelons of society pay the same taxes, but their lives are affected FAR less by something like a parking ticket, and taxes on a pack of cigarettes; and, rarely do they play the lottery. With lower incomes, lower expenditures, and no real property to tax, the lottery is the main way to tax the poor, and it's the only tax that Americans seem to be gladly, almost gleefully willing, to pay.

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1 comment:

  1. If you can afford to throw away the cost of one one ticket with all the trimmings, buy it, because buying one ticket gives you an insignificant chance of winning an amount with an expected utility far greater than the $3 you threw away buying the ticket, which would otherwise not exist (and the marginal $1 cost of adding all the trimmings is negligible). The expected value is less than a dollar, so you are paying for the chance to dream, not to win. Buying more than one ticket does not affect your chances in any meaningful sense. If you cannot afford to throw away the money for a ticket, you should not buy anything, because although one ticket gives you a chance to win, the chance is so small that only the odds that Hillary Clinton won the primary without massive electoral fraud look better. In fact, at one in 77 billion, one person's odds of winning the Powerball Lottery some 263 times are about the same as Clinton having won the 2016 primary without widespread cheating.

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