Lotteries run for or by governments are used to support public programs such as infrastructure development, public safety, public health and education. The principal argument used to support lotteries has focused on their value as a source of “painless” revenue, contributed by players voluntarily spending their money.
How Governments Reduce the National Debt
While most states allow government agencies to garnish prize money, there are only a few states that allow private creditors to collect winnings.
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Some of the states that allow government agencies to take winnings under varying circumstances include:
The Benefits of National Lotteries
Another factor in favor of lotteries is the money that they generate for state-funded projects, with public education and social services projects, in particular, benefiting from the spending made by participants.
They redistribute money up the economic ladder.
This is taking more money from the poor, working and lower middle-classes than from those most able to pay taxes. These billions also are diverted away from local businesses—with the exception of the stores where tickets are sold.
The federal government and all but a few state governments will immediately have their hands out for a bit of your prize. The top federal tax rate is 37% for income over $500,000. The first thing that happens when you turn in that winning ticket is that the federal government takes 24% of the winnings off the top.
Four Ways the United States Can Pay Off Its Debt. In most discussions about paying off debt, there are two main themes: cutting spending and raising taxes. There are other options that may not enter most conversations but can aid in debt reduction, too.
Of course you can spend your way out of recession, almost by definition. A recession can be defined as a shrinkage of spending and income. More spending is needed to generate more income. ... One option might be tax cuts to increase business spending.
Public Debt
The public holds over $21 trillion, or almost 78%, of the national debt. 1 Foreign governments hold about a third of the public debt, while the rest is owned by U.S. banks and investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and savings bonds.
Good news: Lottery winnings aren't subject to the Social Security earnings test, so your jackpot won't reduce your benefits. But like other high-income households, you may have to pay bigger Medicare Part B premiums at age 65. The top premium in 2019 will be $460.50 per month.
For lottery winnings, that means one of two things. ... You'll either pay taxes on all the winnings in the year you receive the money — for winnings paid out as a lump-sum payment. Or you'll pay taxes only on the amount you receive each year — for winnings paid as an annuity.
Likewise, how much does the IRS take from lottery winnings? Lottery winnings are taxed, with the IRS taking taxes up to 37%. Yet the tax withholding rate on lottery winnings is only 24%.
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