State lotteries a cheap tax on the poor?
Are we ready for a time out in the relentless public relations full court press put on by the lottery industry, including the Rhode Island state lottery?
Barely a day goes by without lottery p.r. flacks and their media enablers hyping the latest winners of Mega Millions or thousands or Powerball or whatever the winning total is.
The problem isn’t gambling per se. It is the unremitting government promotion and flogging of gambling that the state gets a cut of.
For those who see lotteries as a cheap tax on the poor, we bring you a piece from Derek Thompson, a senior editor at The Atlantic, where he oversees business coverage for the website.
Citing a PBS report from 2008, Thompson states that households earning less than $13,000 a year spend a shocking 9 percent of their money on lottery tickets.
“For the desperately poor, lotteries perform a role not unlike the obverse of insurance,’’ writes Thompson. “Rather than pay a small sum of money in exchange for the guarantee of protection that you’ll need in the future, you pay a small of money in exchange for the small probability that you’ll win money to help your lot right away. It is, for lack of a better term, a kind of aspirational insurance.’’
Were states better off when the money to run government came from taxes? It is a fact that the bottom of working poor income cohort pays little of no income taxes (they do pay social security levies of course) but if they are tossing their meager funds away on lottery tickets they are certainly paying to support government.