Mega Millions brings windfall to states, too
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Kai Ryssdal: An item, now, about the $640 million lottery jackpot that’s got otherwise rational people piling into what is essentially a no-win deal. A spokesman for the Mega Millions lottery said today that based on how many people are buying tickets and how quickly they’re buying them, they estimate 95 percent of all possible number combinations will have been bought by jackpot time.
So if you draw the winning numbers, chances are you’re gonna have to share it. With me.
But Marketplace’s Jennifer Collins reports it’s not just ticket buyers who’re counting their winnings — states are hoping for a pot of gold as well.
Jennifer Collins: It’s easy to get carried away thinking about how you’ll spend that $640 million.
Mega Millions ad: Mega Millions, dream big. Mega Big.
Taxes may not be in your fantasy, but the federal government will get about 35 percent right off the top. And financial planner Susan Bradley says, it doesn’t stop there.
Susan Bradley: Then there’s state tax, city tax, county tax. If you live in Manhattan, you’re probably paying around 45 percent.
Stephen Cordi: Whichever state that person lives in, that state gets a huge windfall.
Stephen Cordi is with Washington D.C.’s Office of Tax and Revenue. He says taxes from a local lottery winner could make a big difference in a cash strapped state. In the District’s case, the take would be nearly 9 percent.
Cordi: A few years ago, we had a Powerball winner and that was a piece of very good fortune for the the district because we got a lump sum multiple million-dollar tax payment out of it.
Good fortune because Cordi says the district got its tax money up front. But even if the winner takes an annual payout, Cordi says, D.C. would be looking at $2 million a year over several years. That’s enough to make a sizeable dent in the police salaries.
And a quick note to the winner if you’re out there — Susan Bradley says — don’t complain about your taxes.
Bradley: Once you’re a lottery winner, people don’t really have much sympathy for anything that goes wrong in your life.
But don’t worry, the odds are you won’t have to concern yourself with that.
I’m Jennifer Collins for Marketplace.
Ryssdal: Much as has been happening in offices all over the country the past couple of days, we too have been playing the ‘what if you win the lottery’ game here at Marketplace.
Jeff Peters: Yeah, I’m probably going to buy one. You know, because $176 million — them are good odds.
Millie Jefferson: I mean, I’m already a winner in life, but it would be great to have almost a billion dollars to go with that.
Ben Adair: Look, if I want to buy the nicest house in L.A., that’s going to take most of my jackpot right there. Why even play?
Jeff Peters, Millie Jefferson and Ben Adair. Some of the Marketplace lottery hopefuls.