Powerball winners would have paid $17.7 mil more in taxes if they won after going over ‘fiscal cliff

BIV

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Apr 22, 2002
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Powerball winners would have paid $17.7 million more in taxes if they won after going over ‘fiscal cliff’
By Chris Moody, Yahoo! News | The Ticket – 4 hrs ago



The winners of the $587 million Powerball jackpot should obviously consider themselves lucky. But they should be especially grateful that they won in 2012 and not next year, when a possible dive over the so-called fiscal cliff would certainly slash their winnings.

Two Powerball winners, one from Arizona and another from Missouri, were announced on Thursday and will split the jackpot. Assuming they take the lump sum of $384 million right now rather than the full $587 million over 29 years, each winner will receive about $125 million after state and federal taxes. Not bad.

But consider this hypothetical scenario.

Imagine it's Jan. 1, 2013, and President Barack Obama and Republican congressional leaders have failed to reach a budget deal. The breakdown has triggered the dreaded "fiscal cliff," meaning the income tax cuts set by former President George W. Bush have expired across the board and the tax burden on every income bracket has jumped.

Right about then, the Powerball winners are announced. How much more would Uncle Sam collect—assuming the jackpot is the same as it is today—from the fortunate souls who won after the country went over the cliff?

According to Tax Foundation analyst Nick Kasprak, the total tax burden on the winnings would jump by $17.7 million. Because there were two winners, that would amount to about $8.85 million more in taxes per person.

Congress and the White House are currently in last-minute negotiations to avoid some of the tax hikes set for next year. Despite the grandstanding on Capitol Hill this month, Congress should be able to reach a deal before the Jan. 1 deadline, but if it doesn't, taxpayers will be out of luck. There are some experts, like former director of the Congressional Budget Office Doug Holtz-Eakin, who say a failure to act could trigger another recession.

"I'd give us a 30 percent chance of doing something that stupid," Holtz-Eakin, now the president of the American Action Network, said.

If you're not already thoroughly depressed, consider this: Under the doomsday scenario, once the federal government collects its share of the Powerball winnings, it will spend every penny in less than five minutes.
http://news.yahoo.com/blogs/ticket/...RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
 

Ballbuster1

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#2
I think I could still survive on winning over 100 million.
Nice return for 2 bucks.

But it is still disgusting the amount of money the gubbernment
takes in and still runs seriously in the red.
 
Jan 25, 2006
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#3
I'm not sure how the inevitable hayseed winner will ever survive without that extra $18M.
Assuming this is the type of person who wins, they'll need that money to maintain their lavish lifestyle. Trucker hats and Pall Malls don't buy themselves.
 

Motor Head

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Jan 23, 2006
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#5
That's a lot of Gibsmedats! Mitch McConnell busted out laughing at Tim Geitner today when he proposed what Obama wanted to do. Essentially it was "tax the rich and maybe we might cut something next year or something".
 

MagicBob

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Dec 2, 2010
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#6
damn those winkle toed socialists regimes that used to make us pay alllllll that extra tax waaaaaaaay back in 1917-1924 and 1932-1987 and 1991-2003!!!!

I'm sure glad the country isnt headed down the communist trash chute it obvious was back then and we pay lower taxes now.


:action-sm

oh yes... almost forgot... because FREE STUFF!!!!!
 
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tattered

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#7
I'm not sure how the inevitable hayseed winner will ever survive without that extra $18M.
Yeah im sure they would be fine for a few years beings most lottery winners are broke in 5-10yrs anyway but the point of the article to is to point out just how much taxes would jump by using lottery numbers to make it more shocking
 

MayrMeninoCrash

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#8
Anyone who complains about getting taxed an extra $18M after winning half a billion dollars deserves a punch in the nuts.
 

Ballbuster1

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Anyone who complains about getting taxed an extra $18M after winning half a billion dollars deserves a punch in the nuts.
I think the point is more that the govt continues
to take more and more and still is deeper than ever in debt.

I'd have no problem paying the tax but I know the money
will not be well spent.
 

tattered

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I think the point is more that the govt continues
to take more and more and still is deeper than ever in debt.

I'd have no problem paying the tax but I know the money
will not be well spent.
exactly they are just gonna give it to the ni.........
 

MayrMeninoCrash

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#13
there where 2 winners so that is 36 Million
You suck at reading

According to Tax Foundation analyst Nick Kasprak, the total tax burden on the winnings would jump by $17.7 million. Because there were two winners, that would amount to about $8.85 million more in taxes per person.
 

Don the Radio Guy

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Anyone who complains about getting taxed an extra $18M after winning half a billion dollars deserves a punch in the nuts.
Bullshit. That money comes from a pool of money earned (and already taxed at least once) by the people who played the lottery. Attitudes like yours are why we're in the mess we're in now. Enough is enough.
 

tattered

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#15
Bullshit. That money comes from a pool of money earned (and already taxed at least once) by the people who played the lottery. Attitudes like yours are why we're in the mess we're in now. Enough is enough.
don is right. the money the pool comes from has already had its federal and state income taxes deducted from it. its kind of ridiculous that this same money again has to have the same taxes taken out of it again
 

MayrMeninoCrash

Liberal Psycopath
Dec 9, 2004
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#16
Bullshit. That money comes from a pool of money earned (and already taxed at least once) by the people who played the lottery. Attitudes like yours are why we're in the mess we're in now. Enough is enough.
With that logic there would be no taxes because all money has been "taxed" at some point. What if I bought a lottery ticket with a dollar my grandmother gave me for my birthday?

I shouldn't have taxes taken out of my paycheck, because it's paid for by selling goods that have had taxes paid on them by people who bought them using money that they had taxed when they were paid.
 

Don the Radio Guy

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With that logic there would be no taxes because all money has been "taxed" at some point. What if I bought a lottery ticket with a dollar my grandmother gave me for my birthday?

I shouldn't have taxes taken out of my paycheck, because it's paid for by selling goods that have had taxes paid on them by people who bought them using money that they had taxed when they were paid.
All of these are reasons why progressive income taxation is a broken system by design. It's designed to invoke class warfare, and this story/thread is a perfect example.
 

Myhairygrundle

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Jul 16, 2005
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#18
I'll be bold and say it should not be taxed at all. Like any cap gains, the money used to take the risk has already been taxed. Rich,poor, whatever....if you risk your money, you should keep 100% of your return tax free.
 

Norm Stansfield

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I'll be bold and say it should not be taxed at all. Like any cap gains, the money used to take the risk has already been taxed. Rich,poor, whatever....if you risk your money, you should keep 100% of your return tax free.
And if you earn it you shouldn't?
 
Dec 8, 2004
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#23
Always though it was odd you had to pay tax on lottery winnings as it is basically a government agency (ish) that is running it... like if you win anything in say a Ontario Casino or Lottery you don't have to pay tax on it. Also if you win 20 million you get 20 million in a lump sum... none of this x amount of dollars spread over 30 years or whatever.

Stoopid question if you get the yearly payout and you snuff it... do they still keep paying your estate?
 

BIV

I'm Biv Dick Black, the Over Poster.
Apr 22, 2002
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#25
Always though it was odd you had to pay tax on lottery winnings as it is basically a government agency (ish) that is running it... like if you win anything in say a Ontario Casino or Lottery you don't have to pay tax on it. Also if you win 20 million you get 20 million in a lump sum... none of this x amount of dollars spread over 30 years or whatever.

Stoopid question if you get the yearly payout and you snuff it... do they still keep paying your estate?
Nope. Which is why they do it.