Hart: Government the biggest Powerball winner

Hart: Government the biggest Powerball winner

January 22nd, 2016 by Ron Hart in Opinion Columns

A sign calling attention to the large Powerball jackpot is displayed as Jay Patel works behind the counter at the Smart Mart on Highway 301 in Dade County, just north of the Alabama state line on Jan. 10, 2016.

Photo by John Rawlston /Times Free Press.

The record Powerball lottery jackpot, purportedly $1.5 billion, produced three winners last week, each of whom will get a lump sum of about $330 million, which is the most money anyone (if you don't count Prince Charles) has gotten for doing nothing.

All three winners were excited and happy to tell their kids that they can send them to college, and they now can afford to shop at Whole Foods.

I did a lot of media appearances about the lottery, talking about how to invest such windfall money. CNN and NBC thought it an exciting topic since the nation was consumed by the spectacle of it all. One thing was clear: The big winner in the lottery is government.

If you think about it, government is like the Mafia. It runs numbers games (the lottery). It controls drugs (DEA/Customs/FDA). It controls guns (ATF). It has run guns, via the Justice Department with its "Fast and Furious" program. And, via the ATF and state excise taxes, it exerts influence over booze through taxes as high as $34 a gallon on whiskey.

Government operates about the same as the Mafia but with less predictability and better pensions. A Mafia Internal Revenue Service would not target tea party groups that are paying their taxes.

Here are some rough numbers (rounded up) gleaned from this record jackpot. They illustrate just how much money the government takes from citizens to allow them to gamble among themselves.

To afford a $2 Powerball ticket, most people would have to earn about $3 before taxes. Much like cockfights, drug dealers and massage parlors, government accepts only cash for lottery tickets.

Government sold about $2 billion in Powerball tickets (bought with $3 billion pretax dollars) for a Powerball jackpot advertised at about $1.5 billion but which actually was about $1 billion in upfront cash.

I hope you are sitting down: Our government lied to you about this number.

Top line numbers: About $3 billion of pretax dollars were taken from citizens to give them a $1 billion upfront pot. But that's just the beginning. There are federal taxes of 39.6 percent on that amount, plus probably an Obamacare tax of 3.8 percent. Tack on a state tax of 7 percent (if you are lucky), and the government "only" takes half. The jackpot now is down to $500 million — if you do not plan to die.

Die in a few years, and government gets up to another 56 percent in estate taxes, leaving the winners' families to split $220 million.

To recap: The government get $3 billion, less the winners' heirs' $220 million, a net $2.78 billion. The winners' heirs get $220 million, or 7 percent of the jackpot, while government gets 93 percent. Government numbers are like this profundity, found on the wall at a Washington, D.C., bar: "Truth is like poetry. And most people f*%#*^$% hate poetry."

A recent study concluded that 70 percent of folks who win the lottery are broke within seven years. Money does not come with instructions, and what the government does not get, hookers and family hangers-on often do.

Like Democrats, people always proclaim how magnanimous they would be if they won the lottery. But that's an empty, self-serving, meaningless gesture with money they don't have — just like a political promise. Few winners, if any, follow through.

Some say the lottery amounts to a cruel tax on poor people who are not good at math. But just try to take it away. They love it. If you buy a ticket, the odds of winning are 1-in-300 million, and about the same if you do not.

Government should be ashamed. It's just like Major League Baseball: The commissioner said Pete Rose would continue to be banned from the Hall of Fame because he may have gambled on games. The commissioner then had to leave the news conference early to go check on MLB's investment in gambling sites Fan Duel and DraftKings.

I think we are always happy for the folks who win the Powerball, as long as their names are not Khloe, Kim or Kris.

My plan to win the Powerball was not to play it and just have Steve Harvey pronounce me the winner. I'd probably have to split it with Wisconsin's Manitowoc County Sheriff's Department.

Contact Ron Hart at Ron@RonaldHart.com

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