Or one or more of these:
You will likewise be broke soon enough.
Posted on 01/12/2023 6:40:41 AM PST by EBH
Thomas Jefferson said: "A lottery is a salutary instrument and a tax... laid on the willing only, that is to say, on those who can risk the price of a ticket without sensible injury, for the possibility of a higher prize."
A tax only on those willing to pay? Sign me up!
Yep. That’s the downside to the long-term payments.
The figure of 707.9 million is the amount that Mega Millions pays out for a lump sum instead of the 30 year payout of the jackpot. Taxes come after that reduction. First you pay Federal and then you pay state. It varies from state to state as to where you live (and perhaps where the winner is paid out if that is a different state).
So in high tax states, you might end up loosing 50% to Federal and State income tax on the 707.3 cash payment.
In North Carolina where I now reside there would be a 25% Federal withholding and a 5.499% state income tax withholding. So I would keep about 491,990,00 of that cash payout. If I diversified that into 10 different holding and trusts paying out an average of 7% a year, I would have a taxable annual income of $34,439,300.00 per year. If I paid taxes of 50% per year I would have to get by on 17,219,650 per year.
That equates to 161 P911CPA which is the standard measure of wealth in my house and that would be forever. (P911CPA is Porsche 911 Convertibles Per Annum)
Or one or more of these:
You will likewise be broke soon enough.
Every once in awhile I buy four quick pick tickets even though it doesn’t make sense. Why? To have a couple of days of Walter Mitty dreaming of all the things I would do and working people I would quietly, very quietly help while I continued to live a not so splashy life.
As for the taxes, surely someone is over estimating them? There are sites that are official that calculate the net after taxes and based on either immediate payout or long term payments. Taxes are high but I have not seen 45%.
The long term payout seems best in most cases but depends on the interest rate you may think you could manage for the lump sum return. It is hard to have a risk free rate of even 5% these days and over a long term. It used to be 7% but I have not seen that in decades. Risk free is the operative term. There have not been 12% GICs in ages.
“if the winner selects the $568m immediate cash payout.”
Yeah, I’m thinking only an idiot takes a cash payout on a billion dollar win. I mean, you’ll probably get almost 20 million a year AFTER taxes if you take the long term payout. If that’s not enough for you, you might as well just give the money away right now because you’re hopeless.
Yeah; and a LOT of non-citizens, too......plus, they pay for the tickets with their EBT's; it's not THEIR money they're gamblin' with......
I bet you someone in CA or NY wins.
Everyone needs to click the link, scroll down to your State for lump sum and 30 year annuity payout totals.
https://www.usamega.com/mega-millions/jackpot
What if you died tomorrow? I am not sure if lottery winnings are transferrable. Also, see how Illinois handled these types of non-lump sum payments on some lottery tickets. They weren’t able to pay them out and the winners are SOL.
A bird in the hand, indeed.
https://www.lotterycritic.com/lottery-winners/lottery-winners-not-being-paid/
Lazy reporters not bothering to check something that is easily verifiable. Per the Mega Millions website, the cash payout is $707.9 million.
In Washington State they only hold out 28% for Federal taxes even the top rate is 37%, and there is no state or local income taxes.
California does have a state income tax, but lottery winnings are exempt.
If I win I will build a wal mart smack dab in the middle of uber elite democrat strongholds like Chappaqua or Martha’s Vinyard complete with a free bus line directly from the ghettos and every passenger gets a free bottle of liquor upon arrival.
If I am going to gamble, I’ll play poker, craps or even a slot machine before I buy a lottery ticket.
The cash option, minus the state’s take of money from the purchase of tickets, is what it takes to invest in the 30-year annuity to claim the entire jackpot. It is not a 50% tax.
Bust out another thousand.
“minus the state’s take of money from the purchase of tickets”
My point was that the state’s take of money from the purchase of tickets is 50%.
No problem, I got that.
“Who the hell would be dissatisfied with $313 million?”
The government.
“What if you died tomorrow?”
Pretty sure if I’m dead I won’t care that I didn’t get to spend that last hundred million or whatever.
$6 on a lotto gamble over 1.1 billion is a minimal risk. I know I’ll never win but for a moment you think of all the people who would disappear from your life…🙂
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