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WarGamer

(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.

#WealthTaxNow




PS I'll still accept the Grand Prize.

8 replies = new reply since forum marked as read
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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

LeftInTX

(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?

ZonkerHarris

(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

WarGamer

(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.

haele

(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.
Haele

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