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(13,362 posts)
Fri Apr 5, 2024, 05:26 PM Apr 2024

Thinking about the PowerBall tomorrow and how it relates to Taxation and Wealth.

So in California the jackpot after taxes is just under $400m

We all ask ourselves "what would you do with it?"

You see... 400m is fairly difficult to spend.

Can't really buy a Bezos size yacht or you'd be broke in 10-20 years.

So most people would peel off like $300m and buy Federal Gov't Bonds.

You see... a 10- year Bond returns around 4.5% annually.

Or around $14 million a year. Risk-free.

But think about it.

You've taken money out of the circulating money supply... money that was in someones pocket at the 7-11

And you've buried it. Hoarded it.

Some will say... "That money isn't hoarded, it's invested in the USA"

Well... who pays my $14m a year? The US Gov't you say? Who's that?

The married couple paying 20% of their income in Federal Income Tax?

Single dude paying 15%?

Isn't the hoarding of wealth really a transfer of wealth TO the rich?

Through Gov't debt?

The US gov't is 35 trillion in the hole...

16% of ALL Federal spending, 450 billion a year... goes towards servicing US Gov't debt...

Meaning... paying interest to rich people hoarding wealth.


PS I'll still accept the Grand Prize.

8 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Thinking about the PowerBall tomorrow and how it relates to Taxation and Wealth. (Original Post) WarGamer Apr 2024 OP
That 14 million could give 280 people... Think. Again. Apr 2024 #1
st jude could always use money Fullduplexxx Apr 2024 #2
every no-kill shelter from Long Beach to Miami? WarGamer Apr 2024 #3
Deep thoughts! LeftInTX Apr 2024 #4
In CA Only Fed taxes get taken out. Lottery winnings are free of state taxes. ZonkerHarris Apr 2024 #5
Nope. WarGamer Apr 2024 #6
That's only if it's a California only Lottery game. haele Apr 2024 #8
Bookmarking to read after I win leftstreet Apr 2024 #7


(27,479 posts)
4. Deep thoughts!
Fri Apr 5, 2024, 07:13 PM
Apr 2024

I don't play, but if I did, I probably wouldn't think about it unless I won. That's because: What are the odds?


(24,647 posts)
5. In CA Only Fed taxes get taken out. Lottery winnings are free of state taxes.
Fri Apr 5, 2024, 08:38 PM
Apr 2024

Cash value is $608 million so take out 24% for Fed tax and there is your lump sum take home:
$462.08 million


(13,362 posts)
6. Nope.
Fri Apr 5, 2024, 09:28 PM
Apr 2024

37% Federal Income Tax... give or take

608.9m minus 37%... or very close to 37% because not the entire 608.9m is taxed at the highest bracket (almost all)

is $384m

Before winners see a penny of the multimillion-dollar jackpot, there’s a mandatory 24% federal withholding that goes to the IRS. The withholding applies to winnings of more than $5,000.

If you choose the $378.8 million cash option, the 24% withholding automatically reduces your cut by about $90.9 million. However, many taxpayers wrongly assume they’re off the hook after that 24%, Chichester said.

“That 24% comes off the top, but you’re still responsible for the other 13% at some point,” he said.


(12,878 posts)
8. That's only if it's a California only Lottery game.
Fri Apr 5, 2024, 10:12 PM
Apr 2024

Power ball is multi-state, the revenue from ticket sales is not just for California. The state doesn't get a sufficient percentage of the winnings to make up for the windfall tax list on the big lottery winnings from a Powerball ticket.
You win a California MegaMillions or Fantasy Five, they get 25% of the pot, and Dept. Of Education gets another 25%. That covers the tax owed by to jackpot winner and everyone else down the line.
I won a smaller state game jackpot (under 6 figures, enough to pay off credit cards, medical bills and get a 175cc scooter for commuting to work) once, that's how it was explained when I got my check.

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