46 ms·

It's probably just because I'm not used to it, but taxing winnings from gambling never made much sense to me. Especially if it's run as a government monopoly.

It's probably just because I'm not used to it, but taxing winnings from gambling never made much sense to me. Especially if it's run as a government monopoly. Taking a cut on the house-side seems way more stable and assured to me, and the numbers are more closely related to what you get. It's a shame the US taxes citizens wherever they are on earth, or I'd expect the done thing to be leaving the country to avoid those taxes, since the money saved would certainly cover it. I'm sure there's a few accountants around who could come up with a tax minimization scheme that's well worth their cost though. Not here though, national lottery/euromillions are tax free and paid out in one lump sum.

toast0 4y ago
> Especially if it's run as a government monopoly. It's a state-run government monopoly. The federal government taxes the winnings, but can't tax the state revenue, as state and local government are tax exempt. The company that runs the lottery is taxable, of course, but they're (hopefully) not getting the lions share of the house edge. I know California doesn't charge their income tax on winnings from their lottery though. The problem with tax minimization on lottery winnings is that you need to do the work before the tickets are valuable. If you make a habit of buying your lottery tickets in a tax advantaged account, then ok; but if you try to move it after it's a winning ticket, that's not going to work well.
wahern 4y ago
> taxing winnings from gambling never made much sense to me. If you didn't tax winnings, then you're merely inviting a deluge of tax evasion and money laundering schemes. But note that gambling losses are deductible. (You can even itemize your lottery ticket spend.) The caveat is that gambling deductions can only be used to offset gambling winnings; again, because otherwise you're inviting a ridiculous amount of difficult to police fraud. > Especially if it's run as a government monopoly. Some states, like California, don't tax state lottery winnings. (But neither do you get deductions for lottery losses.) For other states--at least those with an income tax--I suppose it's just a matter of simplicity to not distinguish state-controlled from private lotteries.
- wodenokoto 4y ago
  You can tax the pot.

toast0 4y ago

> Especially if it's run as a government monopoly. It's a state-run government monopoly. The federal government taxes the winnings, but can't tax the state revenue, as state and local government are tax exempt. The company that runs the lottery is taxable, of course, but they're (hopefully) not getting the lions share of the house edge. I know California doesn't charge their income tax on winnings from their lottery though. The problem with tax minimization on lottery winnings is that you need to do the work before the tickets are valuable. If you make a habit of buying your lottery tickets in a tax advantaged account, then ok; but if you try to move it after it's a winning ticket, that's not going to work well.

wahern 4y ago

> taxing winnings from gambling never made much sense to me. If you didn't tax winnings, then you're merely inviting a deluge of tax evasion and money laundering schemes. But note that gambling losses are deductible. (You can even itemize your lottery ticket spend.) The caveat is that gambling deductions can only be used to offset gambling winnings; again, because otherwise you're inviting a ridiculous amount of difficult to police fraud. > Especially if it's run as a government monopoly. Some states, like California, don't tax state lottery winnings. (But neither do you get deductions for lottery losses.) For other states--at least those with an income tax--I suppose it's just a matter of simplicity to not distinguish state-controlled from private lotteries.

wodenokoto 4y ago
You can tax the pot.