So you just won the Mega Millions

4Q Basket Case

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Nov 8, 2004
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Most of the tickets are purchased by poor people, hoping to get rich; the people who can least afford to buy them, that’s what it means.
I disagree with that, because I work with some guys (retired) who buy tickets every time we go to Pensacola, and nary a one of them is anything closely resembling poor; more like upper middle class. Most of the “less well off” folks I work with don’t buy lottery tickets or go to the casinos.
Floyd Mayweather bought $2000 worth when it was really high a week or two ago.
So, it is a tax on anyone who “wants” to buy a ticket, just like anyone who “wants” to smoke cigarettes or drink alcohol pays extra taxes. It’s just that it’s elective, not like a sales tax or gasoline tax which pretty much everyone pays.


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I wonder how the profile of lottery ticket buyers compares to the population as a whole? I don't know the answer, but sure am curious.

Regarding the taxes on cigarettes and alcohol: The taxes aren't to discourage "bad" behavior." They have nothing to do with that at all. Governments tax these and other similar items because, in economic terms, demand is relatively inelastic.

In more everyday language, the amount people buy doesn't change much, even if the price goes up. They may moan and complain, but they buy. It takes a huge price increase to put much of a dent in demand, so government revenues from these taxes remain relatively level and predictable through recessions, inflation, price changes, etc.

The taxes on gasoline are a slightly different story. Demand for gasoline is also relatively inelastic. Price goes up, people complain, but it takes a massive increase to get people to drive less or spring for five figures for a a more fuel-efficient car.

The difference is that, ostensibly, gasoline tax revenue is intended to fund road maintenance and construction.

Sounds logical -- those who use the roads more cause more wear and tear, buy more gasoline, and therefore pay more in gasoline taxes to compensate for that.

Trouble is, politicians being what they are, they tend to either (1) overtly divert the money elsewhere, or (2) delay road maintenance, thereby creating the illusion of a surplus which, you guessed it, goes somewhere else....while we all drive on potholed, patched roads that will shake your teeth, knock your wheels out of alignment, and burst tires.
 
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twofbyc

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Oct 14, 2009
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I wonder how the profile of lottery ticket buyers compares to the population as a whole? I don't know the answer, but sure am curious.

Regarding the taxes on cigarettes and alcohol: The taxes aren't to discourage "bad" behavior." They have nothing to do with that at all. Governments tax these and other similar items because, in economic terms, demand is relatively inelastic.

In more everyday language, the amount people buy doesn't change much, even if the price goes up. They may moan and complain, but they buy. It takes a huge price increase to put much of a dent in demand, so government revenues from these taxes remain relatively level and predictable through recessions, inflation, price changes, etc.
Yeah, I never said taxes on alcohol or cigarettes were “sin” taxes; only that people can choose to purchase them and pay the tax, or not.
On grocery items/clothing/gas, there’s not really any choice; unless you choose to stay home naked and die from starvation.
If a lottery ticket is a “tax”, it falls into the former category, not the latter.


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