The Pennsylvania Lottery

I had this nifty chart I put on the board when my American government class discussed taxing and spending.  It was a way to compare various revenue sources used by governments.

The chart included such items as:

•  Is it good source of revenue?

•  Is it based on ability to pay?

•  Is it easy to collect?

•   Does it promote beneficial social goals?

Since the main source of revenue for the feds is the income tax, for many states the sales tax, and for local governments the property tax, you can do a quick comparison.

All three types of taxes raise a lot of money, but the income tax, although supposed to be graduated, has so many exceptions that it is not really based on ability to pay.  The sales tax and property tax certainly are not based on ability to pay.

The income tax is easy to collect if you work for a company that automatically deducts it.  Otherwise, not so much.  The sales tax is generally easy to pay, unless you are buying a big ticket item like a car.  The property tax is often paid in a lump and is very difficult for many people to pay.

The income tax could be redistributive, which I think is a good thing over all.  The sales tax and property tax have very little, if any, beneficial social goals.

Let us now look at the Pennsylvania lottery.  It is a good source of revenue.  People line up to buy tickets when the Powerball reaches hundreds of millions. 

It is definitely not based on ability to pay.  Poor people play the lottery.  How many rich people do you see buying lottery tickets?  None.  I have never won the lottery because I don’t play it.  That means I have almost as much chance of winning the big one as people who do play it, which is zero.

It is easy to collect.  The poor benighted saps actually fork over their hard earned money to take a chance, sometimes foregoing necessities.

It certainly does not promote beneficial social goals.  What happened to save your money, invest your money?  That is so old-fashioned.  Take a chance.  Buy a ticket.

Our legislators know that the lottery is a ripoff.  In a recent study quoted in the Times News, the average return on $1 spent on a lottery ticket is 52¢.  You would be far better off putting your money in a Christmas cookie tin and hiding it under your bed.  

Perhaps the biggest charade is the announcement at the end of some lottery ads giving people who have a gambling problem a number to call.  If you are a Pennsylvania legislator, you do not want people to call that number.  You want them to be stupid.  You want them to be gullible.  You want them to blow their money and scratch their tickets.  What an immoral system to raise revenue.