Huge tax on Mega Millions $1 billion jackpot causes outcry on social media: 'CONGRATS to the IRS'

Fox News ^ | 1/12/22

[EBH]

Some Twitter users calculated what the value of the Mega Millions jackpot would be after tax — and the results are disappointing.

The Mega Millions grand prize shot up to $1.35 billion after Tuesday’s night’s drawing passed with no official winner.

The prize is the second largest in history, but a number of investing and finance gurus on Twitter estimated that the eventual winner would be taking home far less than $1 billion when all is said and done.

One thing that multiple Twitter users agreed on was that the IRS would win out no matter what.

"The only guaranteed winner in tonight's $1.1 billion Mega Millions drawing is the IRS," Grit Capital CEO Genevieve Roch-Decter tweeted on Monday. "They'll collect at least $200 million immediately if the winner selects the $568m immediate cash payout."

Business author Jared Dillian did an in-depth estimate of the full lottery earnings. "The Mega Millions jackpot is $1.1B. The cash value is $568.7mm. Assuming a 45% tax rate, that leaves you with about $313mm. If you took the cash option and put it in T-bills yielding 4.5%, you would make about $14 million a year, or $38,500/day. Think you could live on that?"

[Wuli]

New Jersey has a tax in addition to the state income tax, which is a tax on high gambling earnings, which adds a straight 8% to the tax New Jersey will collect on any MegaMillions or Powerball windfall.

[pepsi_junkie]

I'd take it. But it's less than I thought. I thought the immediate payout option was half. Years ago I think it used to be. It's more like a third now though.

Still life changing but I'd probably have to curb my plans to buy an uncharted island and build a massive secret death ray on it powered by nuclear fusion generators and the kinetic energy of a pool of sharks with lasers on their heads.

[pepsi_junkie]

New Jersey has a tax in addition to the state income tax

Because of course they do. I can't stand this state. If my wife would agree to move ...

[Dead Corpse]

True, but the only 100% certain way to ensure you don’t win is to not play. Eventually, someone bad at math is going to come up extremely lucky.

You’ll continue doing excellent math, they’ll be sipping mimosa’s on their new yacht in the Caribbean.

[Not_Who_U_Think]

Neal Boortz, a former talk show host in Atlanta, would refer to the Georgia lottery as the “stupid tax”.

Yeah, I know. Somebody wins, and blowing a few bucks isn’t going to break anybody, but I just can’t stand the “It’s FUN blowing your money on tickets!” commercials.

[sit-rep]

I always planned on just banking it and living quite large on a mere 1 to 1.5% interest...

[zeestephen]

Uh-Oh!

Next drawing is Friday the 13th!

[wrcase]

Unfortunately Herve Villechaize passed away about 20 years away, so you’ll have find a different cook.

[sit-rep]

My baby is just waiting for my call...

https://youtu.be/_4w502p4Njw

[Extra-Ordinary Objectives]

Interesting, the article didn’t calculate that the prize money is also just a fraction of the amount payed for the tickets. The excess doesn’t go to the IRS, but it is still going to tax revenue?

[IYAS9YAS]

But let’s call it what it is. It’s a poor-tax.

And a tax on those who are bad at math. I call it entertainment. I used to go to movies and dinner out, now I don't. I spend a few bucks here and there on a lottery ticket when the big numbers come around. It's grand entertainment thinking about what I could do with the money. But I know the odds are better for me being struck by lightning.

[Michael.SF.]

The government places tight controls on gambling, such as horse racing. IIRC, the tracks have strict limitations on expenses, advertising. The payouts must must meet a minimum criteria, which is pretty high. Those same requirements should apply to the lottery.

There are additional groups making millions of dollars off of the lottery: The government and the people hired to promote and run the lottery.

I had a 'What if' discussion on that specific subject with a relative, who is an attorney. His response was: Yes, you would have a legitimate case making that claim, but to the jury, you would look like a greed a$$ and would have no sympathy from them.

[G Larry]

Give the winning ticket to a charity (501c3) in a non-disclosure state (OH, KS, etc)

The IRS gets nothing and nobody gets pestered or threatened by cons and thugs.

[Michael.SF.]

It has been ages since I did present value calculations. What is the interest rate used on that calculation form 1.3 billion to 707 million?

[BitWielder1]

I don't recall IRS paying for half the ticket.
Instead I'm paying for it with money that's already been taxed.

[plain talk]

“Who the hell would be dissatisfied with $313 million?”

I would. The tax rates are too high.

[Preachin']

My first big purchase would be a bass boat, all decked out.

[montag813]

Just send it to Zelenskyyyyyyyyyy!

[Vision]

It destroys initiative from those needing it most and replaces it with false hope, while paying to do so. If I was king I would ban it out of compassion.