Raising the tax on the mathematically challenged

Mega Millions lottery is more than doubling the price of a ticket to $5

$1 billion

...It’s hard to fathom how unlikely it is to beat odds of one in 292.2 million for Powerball or one in 302.5 million for Mega Millions.

To get a sense of your chances, Steven Bleiler, a mathematics and statistics professor at Portland State University, said people should imagine a swimming pool 40 feet (12.2 meters) wide, 120 feet (36.6 meters) long and 5 feet (1.5 meters) deep, filled to the brim with M&Ms, only one of which is green. To win, all a player must do is jump in blindfolded and wade around until finding that single green candy.

Source.

Good luck everybody.

Feds: "Lottery Lawyer" ripped off $107 million from winners

 He called himself the “Lottery Lawyer,” developing a national reputation for helping high-profile lottery winners with their investments.

He promised to secure their wealth for generations and to protect them from scam artists.

But on Tuesday, federal prosecutors in Brooklyn accused the lawyer, Jason M. Kurland, of working with a mob associate to steal millions of dollars from his clients.

Mr. Kurland, 46, was arrested on Tuesday morning at his home on Long Island alongside three other men — including Christopher Chierchio, 52, who prosecutors said was a reputed soldier for the Genovese crime family.

As part of the scheme, Mr. Kurland tricked three lottery winners who had hired him into putting $107 million into various investments, prosecutors said. The lottery winners lost a total of more than $80 million.

One of them was the winner of last year’s $1.5 billion Mega Millions jackpot in South Carolina.

Read the rest here.

Anyone else got the same lottery numbers?

Yeah, I dropped $2.00 on it.

Lotteries, payday lending, and the swindling of America’s poor

...But there is one set of related policy ideas that would dramatically help the poor and should not be ideologically divisive. How about a renewed effort to help the poor by refusing to cheat them?

I am referring to a broad and growing collaboration between government and business to systematically defraud and exploit the poor through state lotteries, payday lending and payday gambling.

The lottery is a particularly awful example of political corruption. Here government is raising revenue by selling the Powerball dream of wealth without work. Studies in a number of states have shown that lottery ticket sales are concentrated in poor communities, that poor people spend a larger portion of their income on tickets and that the poor are more likely to view the lottery as an investment. “This could be your ticket out,” promised one typical billboard in a distressed Chicago neighborhood.

Think on this a moment. In a place where government has utterly failed to provide adequate education and public services, government is using advertising to exploit the desperation of poor people in order to raise revenue that funds other people’s public services. This is often called a “regressive” form of taxation. The word does not adequately capture the cruelty and crookedness of selling a lie to vulnerable people in order to bilk them. Offering the chance of one in a 100 million is the equivalent of a lie. Lotteries depend on the deceptive encouragement of mythical thinking and fantasies of escape.

Read the rest here.
HT: T-19

Good News for the IRS

After an absolutely horrible week, things may be looking up for the IRS. The odds overwhelmingly suggest that someone is going to discover in the next 24 hours that they owe the US Government something north of $150,000,000.00 (that's 40% of $376 million).

If you’re lucky enough to win the upcoming $600 million Powerball, you’ll also be putting a big smile on Uncle Sam’s face.

And when it comes time to give the tax man his share, your total bill will have a lot to do with which state you live in.

For example, if you buy a ticket and live in Florida, you'll pay less than if you live in New York; Florida does not collect state tax on lottery winnings. A New York City Powerball winner can expect to pay about $197.1 million – or more than half of a $376.9 million lump sum payment – in federal, state and city taxes.

The tax bite happens in stages. The very day you cash in your winning ticket you'll be hit with a withholding that is deducted immediately from your payout. Then, next April, you’ll pay whatever additional tax you owe based on the bracket you’re in after you add up all your other earnings.

Read the rest here

Lottery Fever (again)

Yep, the Powerball is up to $500,000,000.00. And that has millions of people queuing up to spend large sums of money that in far too many cases they can't afford to part with. Look, here's my take. If you want to drop a buck or two on the lottery, fine. I've done it myself in the past. You can write that off as cheap entertainment. For a couple of bucks you get to daydream about how you would spend a ridiculous amount of money. But it's a lousy retirement plan. Which is to say if your spending more than a couple of bucks then you are just throwing away money.

As someone much wiser than I once observed, the lottery is a tax on the mathematically challenged.

Congrats!

To my friend Lori who won $7.00 on a $5.00 Mega Millions ticket.  She hasn't decided if she is taking the lump sum or the annuity.  I'd go with the lump sum.  The Mayans were pretty sure the world is going to end this year.  More good news, she won't have to declare that on her state income tax since California doesn't tax lottery winnings.

On a side note someone right here in Modesto (not me) actually got 5 of the numbers right and will collect a little over $250.000.00 before Federal taxes.  Another second prize ticket was sold just up the road in Manteca.  No jealousy of course.  None at all.

Lottery Rises to $640 Million

Someone just emailed me in response to the previous post to inform me that the lottery is now up to $640 million.  I tried to verify that but the lottery website seems to have crashed.  This reminds me of a famous book on manias and the madness of crowds.

Lottery Fever Has Americans Seeing Green

With a world record $540 million (and growing) jackpot at stake, much of the nation is gripped by Mega Millions fever. Millions of lottery tickets are being snapped up ahead of Friday night's Mega Millions drawing, which could provide a lucky ticket holder with a lump-sum payoff of about $390 million.

From Vermont to Louisiana and New York to California, the jackpot has been the wistful talk of TV, social media sites, office water coolers and dreamy high rollers for the past week, electrifying ticket sales with a frenzy likely to amp up even further ahead of Friday night's drawing at 11 p.m. ET.

Read the rest here.

Go ahead and drop a buck or two if you want to daydream (I did). Just remember though that come Monday you will have to go back to work. Your odds of winning this thing are MUCH lower than the odds of the Chicago Cubs winning the World Series... every year for the next ten years.

P.S. Just for fun, how do you plan to spend your new fortune (you know you have the winning ticket of course)?

Guess what; you're not going to win the Mega Millions tonight

And that's probably a good thing...

Hey, guess what, everybody – you're not going to win the lottery tonight!

In case you've somehow avoided all the hoopla, tonight there is a Mega Millions lottery drawing – $355 million! – that your chances of winning are so infinitesimal as to be virtually nonexistent.

Not that it hasn't been fun reading about the dreams of random deluded people quoted in lottery-hype stories. We get it: You'd buy yourself some nice things, provide for your family, maybe donate to charity (or, as the case may be, burn money in front of poor children).

So let's say you win big (again, not going to happen) and get that hefty lump sum. Is it all it's cracked up to be?

The site Business Pundit has a rundown of 10 of the most surprising examples of post-lottery meltdown, and, coincidentally or not, two of them involve people from our humble state. One, a machinist named Kenneth Proxmire, won $1 million in the Michigan Lottery in 1977 and tried to open a chain of sporting-goods stores in California, only to fail and wind up in bankruptcy. In 1989, a man named Willie Hurt won $3.1 million in the Michigan Lottery, and within two years had blown his new fortune on crack cocaine and lost his wife and kids.

That's just Michigan. Other stories include those of the lottery-winning man whose brother tried paying to have him killed, the guy who was so bored with his new fortune that he went back to work at McDonald's, the Texas farming community that fell into ruin after 43 of its residents became overnight lottery millionaires and the man who committed suicide within two years of winning a $31 million jackpot. Then there's Jack Whittaker, whose $315 million windfall in 2002 resulted in the drug-related deaths of his granddaughter and her boyfriend and provides the origin of the phrase “lottery curse.”

Read the rest here.

Full disclosure (lest I be accused of hypocrisy); yes, I have bought an occasional lottery ticket. So I am not judging anyone. Just be sure that at least one part of your brain remains firmly anchored in the real world and you understand that no, you are not going to win. Think of it as cheap entertainment (cheaper than a movie ticket) that allows for a little daydreaming. And remember that there is no statistically significant change in your odds if you drop a buck or $100. You get the exact same day dream and you are still not going to win. The only difference is that we are no longer talking about cheap entertainment. We are now talking about either compulsive gambling or a delusional belief that you might actually be "that guy." (Kinda the same thing?)

On the extremely off chance that someone reading this has the good (or mis-) fortune of being statistically struck by lightning (repeatedly and in the same place) and is inclined to point it out to me... Yes, I will eat crow, for a price. :-)