I was reading the story about the guy in Michigan who won the 136 million dollar Mega Millions game jackpot. In past times when watching the news or something on tv and they mention what the winnings would be before and after taxes, the dollar amounts never add up. I know you have to pay your taxes on it, but the before taxes amount is way under what the jackpot is. For instance the guy in Michigan hit the 136 mil jackpot, he went the lump sum route but gets 84.3 million before taxes, and 59.6 million after taxes. So what happened to the other 50 million bucks? Who gets that, where does it go? I'm confused.

 

The state keeps it.
Other wise you take it in payments and the state gets to keep the interest on it during to 20 or 25 yrs that they're paying it out.
Either way the state is earning money off of that lotto ticket.
That's the whole point of the lottery...for the STATE to earn funds. It's not so John Q. Public can WIN.

 

They use a discount method if you take the lump sum up front.

 

Oregon lotto = Tax on the poor

 

Only because the poor play it.
They could choose not to play...as I do.

 

I can read lower case letters just as well as all caps.

I thought that's what the taxes are for, so the state and feds get a cut of it. Seems like skimming off the top in a way.

 

I do not play the lottery either. Maybe once in a while I'll get a hunch to do it, but my spendings on lottery tickets each year is maybe 10 or 15 bucks.

 

Wasn't implying anything with the caps. Just trying to emphasis my point.
No offense intended.
The taxes are something that is taken for any earnings that you make.
The other money that they keep is the reason for the lottery.
I believe only the state is getting a cut.
These funds go to completely different govt. accounts. But yes it is skimming off the top. Govt. bureaucracy at it's best.
But again they don't do the lottery for you or me they do it for them.

 

that was the point.

 

Lottery = Voluntary Taxation.........

 

You better believe the IRS gets their share and it isn't just the lottery . People that win all those prizes on game shows on tv have to pay tax on the value of the prizes .

 

I thought it was a tax on people who are bad at math.

 

If you look at the probability to win the lottery is a bad business. On the other hand you can see it like this:
For the price of some $ you get a weekend full of dreams. "What if I won 50 million bucks? Which color for my Rolls Royce?"
So the lottery is the anti alcoholic and legal alternative to beer, whiskey and dope.

AlpineRAM

 

When the Mega, or Lotto or quinto get huge I sometimes buy a couple tickets. It's cheap entertainment.
But I don't spend over $20 a year on it. When they first started Lotto here in Wa they promised money from it would pay for schools and there would be no more tax levy's. That never happened and we still have levy's.

 

To answer the original question, " What happened to the other 50 mil? ". The jackpot was only the cash payout amount. ( minus a cut for the state.) If you took the cash payout and bought an anuity that paid out over twenty years it would add up to the 139 Mil. In other words the 50 mil was what the cash payout would earn over twenty years. So the 50 mil doesn't exist at present. The hard part isn't understanding this, it's getting a winning ticket.
I play the lottery weekly, I know it's not a good bet but I can afford what I lose and enjoy thinking about how many lives I could change for the better if (and when) I win. Good luck to those of you who also play.