Is the Lottery Taxing Low Income People?

lottery

Lottery is a popular pastime that allows people to fantasize about winning a fortune at a cost of just a few bucks. For some people, lottery play is a harmless fun activity, but for others-especially those with the lowest incomes-it can become a serious budget drain. Indeed, numerous studies have found that those with low incomes make up a disproportionate share of players. Some critics call it a disguised tax on those who can least afford it.

A lottery is a game in which numbers are drawn at random for the purpose of determining a prize. The word comes from the Middle Dutch lottery, a calque on Middle French loterie, and is related to the English noun “lottery,” which itself is a calque on Old English lothrie, meaning “action of drawing lots.” The practice of distributing prizes by lot has a long history, including several instances in the Bible, as well as the use of lotteries for military conscription and commercial promotions in which property is given away. Lotteries are also commonly used to determine the winners of public and private prizes, such as the distribution of prize money in state-sponsored sports tournaments.

A lottery has been a popular source of revenue for states, and in fact, the principal argument in favor of lotteries is that they provide a source of painless state government revenue (that is, players voluntarily spend their money as opposed to being taxed). However, research suggests that lottery popularity does not necessarily relate to the objective fiscal health of the state; it may simply reflect voters’ desire to avoid raising taxes or cutting other public services.

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