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Huge tax on Mega Millions $1 billion jackpot causes outcry on social media: 'CONGRATS to the IRS'
Fox News ^ | 1/12/22

Posted on 01/12/2023 6:40:41 AM PST by 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?"

(Excerpt) Read more at msn.com ...


TOPICS: Chit/Chat; Humor
KEYWORDS:
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To: EBH

61 posted on 01/12/2023 8:50:31 AM PST by Diana in Wisconsin (I don't have, 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set. )
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To: JSM_Liberty

Maybe designate a bunch of co-winners to soften the bite?


62 posted on 01/12/2023 8:54:58 AM PST by Bethaneidh
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To: Taxman

Ping


63 posted on 01/12/2023 9:12:33 AM PST by Taxman (SAVE AMERICA! VOTE REPUBLICAN IN 2023 AND 2024!)
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To: shotgun
Re: "It is not a 50% tax."

If you live in California it is.

Federal - 37%

California - 13.3%

64 posted on 01/12/2023 9:13:06 AM PST by zeestephen (43,000)
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To: zeestephen

California doesn’t tax lottery winnings


65 posted on 01/12/2023 9:30:33 AM PST by shotgun
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To: zeestephen

Click here for State breakdowns of Mega Millions taxes. California doesn’t tax lottery winnings.

https://www.usamega.com/mega-millions/jackpot


66 posted on 01/12/2023 9:33:26 AM PST by chuck allen
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To: dljordan; plain talk; Hyman Roth
Now that I've read the few replies to my initial posting...I noticed that I screwed up. I meant to type "Who wouldn't be satisfied with $313 million?"
67 posted on 01/12/2023 9:53:51 AM PST by Bloody Sam Roberts (Great minds drink alike...me and my baby havin' a hell of a night. - - BB King)
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To: Bloody Sam Roberts

“Now that I’ve read the few replies to my initial posting...I noticed that I screwed up. I meant to type “Who wouldn’t be satisfied with $313 million?””

I wouldn’t. The tax rates are too high.


68 posted on 01/12/2023 9:58:39 AM PST by plain talk
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To: shotgun

If there is “outcry” and “surprise” then clearly people have no concept of how much tax they pay.

This is one argument in favor of the Fair Tax. If people are (federal) taxed at point of sale it becomes much clearer how much federal tax is being collected. And possibly some accountability will be demanded.


69 posted on 01/12/2023 10:00:53 AM PST by goo goo g'joob
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To: Bloody Sam Roberts
Who the hell would be dissatisfied with $313 million?

Nobody, if it was a $313 million jackpot.

When it's called a $1.3 billion jackpot however and all you get is $313 million, I can see it being a bit of a letdown.

70 posted on 01/12/2023 10:01:31 AM PST by SamAdams76 (4,777,271 | Truth Social | 87,821,414 | Twitter | Trump Followers)
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To: Michael.SF.

Re: Present Value

I have never completely understood present value.

Anyway, you can take your money in the form of a 30 year annuity.

Your annuity would cost $642 million.

$642 million + $708 million (Cash Option) = $1.35 billion

You get a $45 million check each year, but I do not know how to calculate the necessary interest rate on a declining asset.

I do know how to calculate historical inflation.

If you won $45 million a year in 1993, your purchase power has dropped 53% in 30 years.


71 posted on 01/12/2023 10:05:32 AM PST by zeestephen (43,000)
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To: zeestephen

Click the annuity option for your state here..

https://www.usamega.com/mega-millions/jackpot


72 posted on 01/12/2023 10:19:12 AM PST by chuck allen
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To: EBH

My accountant told me that, if one takes the lump sum and pays typical state and federal taxes, one would net about 36% of the face amount.

That means about $400,000,000 take home on a $1.35 billion prize.


73 posted on 01/12/2023 10:45:15 AM PST by muir_redwoods (Freedom isn't free, liberty isn't liberal and you'll never find anything Right on the Left)
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To: Bob434

Never take the annuity from the state lottery. Nothing prevents a sovereign state from simply deciding they don’t want to pay after, say, year seven.


74 posted on 01/12/2023 10:49:04 AM PST by muir_redwoods (Freedom isn't free, liberty isn't liberal and you'll never find anything Right on the Left)
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To: muir_redwoods

Yep my thoughts too- just like having money in a bank is no guarantee that they won’t say at some point “Nope- you can’t have it - orders from the government”- Greece froze people’s bank accounts- if the left go rogue enough here- they may do the same


75 posted on 01/12/2023 10:53:08 AM PST by Bob434 (question)
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To: chuck allen

Thanks for the link.

I just assumed you got the same check each year.

In Washington state it starts at $20 million a year and reaches $84 million in the final year.

I had no idea.


76 posted on 01/12/2023 10:57:09 AM PST by zeestephen (43,000)
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To: Diana in Wisconsin

Does this make my but look big? YES


77 posted on 01/12/2023 11:43:17 AM PST by conservativesister (.)
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To: Bob434

A perfect use for gold, platinum and silver. An added plus is I could always ask my children to “hold, a million or two in gold for me. That’s a non-taxable event.

About 550 Troy oz. come to about a million. Once you’ve bought it it’s damned hard to trace.


78 posted on 01/12/2023 12:08:04 PM PST by muir_redwoods (Freedom isn't free, liberty isn't liberal and you'll never find anything Right on the Left)
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To: EBH

People are so greedy! If you don’t like the terms of the payout, don’t play!


79 posted on 01/12/2023 12:12:46 PM PST by Albion Wilde ("There is no good government at all & none possible."--Mark Twain)
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To: conservativesister

She’s SUCH an idiot! This is the dress ‘donation’ that started the House inquiry on her and her finances.

She must’ve really p*ssed off Mother Nancy for that to even happen!


80 posted on 01/12/2023 12:26:26 PM PST by Diana in Wisconsin (I don't have, 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set. )
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