Lottery Taxes

Lottery is a form of gambling that is run by state governments to raise money for different services. A large percentage of proceeds go to prize money, while the rest is usually routed to a city or state to help fund things like education and other government programs. It’s a popular source of funding, and one that has been around for centuries.

In the immediate post-World War II period, when lottery began to rise in popularity, there was a belief that it would allow states to expand their array of services without having to increase taxes too much on the middle class or working classes. But the truth is that the percentage of money raised by a lottery that actually makes it to the people who use those services is quite low.

The real reason lottery works is that there’s an inbuilt human desire to gamble, and a big part of the marketing that goes into it is dangling the promise of instant wealth in a time of inequality and limited social mobility. And when you look at the data, it really does appear to be a regressive tax on those who are least likely to afford to play.

I’ve talked to a lot of lottery players, and they tend to be a group that’s disproportionately lower-income, less educated, and nonwhite. And they spend a significant amount of their incomes on these tickets. When you talk to them, they tend to think of it as a good thing to do, and that they’re doing their civic duty.