BASEHEAD said:
Im in MA, the lottery here is huge and a huge source of income for the state.
"Essentially, for Tennessee to realize $200 million dollars from a lottery, about $600 million dollars will be taken out of the economy, meaning the state's businesses will forego at least this amount in sales (not counting the multiplication effect). Additionally, cities, counties and the state lose tax revenues that would have been collected if that money had been spent on goods and services.
Using information published in 1991 by Mary O. Borg, Paul M. Mason and Steven L. Shapiro in their study on the economic consequences of state lotteries, the Gambling Free Tennessee Alliance estimates that Tennessee can expect to lose from $20 million to $66 million in local option taxes alone. This does not mean that the state "nets" the difference between the lottery receipts it keeps and the loss of tax revenues. The true effect is a loss of an estimated $666 million by individuals, businesses, and state and local governments in order for the state to keep $200 million."
http://www.lifeway.com/lwc/lwc_cda_article/0,1643,A%253D151256%2526X%253D1%2526M%253D50088,00.html
I gave the example of Tennessee because they were considering adopting a state monopoly lottery so there was an article written about it. The same case can be made for every other state with a lottery. Buying lottery tickets is form of regressive taxation, and causes a deadweight loss.
How can anyone possibly think that the state lotteries are structurally sound? The people who buy the lottery tickets are poor. The poor people lose money because of the tax on lottery tickets, and they lose because lottery tickets are -EV. A system that taxes the poor is supposed to better society?
cussin'it said:
You call this regressive. Yet it's a choice made by individuals. You wanna talk regressive, lets talk the escalating sales taxes and the individual income taxes.
"Lottery proponents counter the regressivity claim by arguing that the lottery is voluntary and that the poor spend a disproportionate amount of their income on the other consumer items as well, but this argument fails to take into account that fact that, unlike other consumer goods, lottery tickets are sold and promoted by the government.
Should the government be in the business of selling, marketing, and profiting from an item on which the poor spend-ableit voluntarily- a high percentage of their income (or even a higher dollar amount) than do the middle class and the wealthy?"
http://www.taxfoundation.org/files/0817c13300e7a380682288694149aebd.pdf#search='taxes%20collected%20from%20lotteries'
How the hell do you say income tax is regressive? Poor familes pay a smaller percent than rich families. Do you even know what regressive means?
cussin'it said:
Generally on the fence on this issue. Alot depends on the "earmarking" of the funds generated by them. In Missouri I understand that all monies over the payout and the administrative costs go to education.
Why not create a regular tax that doesn't hurt the poor? The regressivity for lottery tickets, on a scale of -1 (completely regressive) to +1 (completely progressive), is about -.2. That means the majority of the burden is on the poor.
cussin'it said:
Part of the obsession with state lotteries is the FACT that states are seeing their federal funding in serious decline. This current set of Conservative clowns in charge would rather spend like drunken sailors on massive defense increases (keep in mind the war on terror and Iraq, is only a fraction of the entire defense budget), rather then help the states with funds they absolutely need for infrastructure, health, and education.
Spending for social programs is liberal. Bush has been spending too much, but what does that have to do with lotteries? Lotteries have existed for hundreds of years before Bush's liberal spending policies.
Perhaps the government should learn that it can't handle running the economy. Let the private enterprises take care of the sectors (99% of them) that government can't efficiently run. The government doesn't care about efficiency because they have the power to tax.
