(Palm Beach Post) Frank Cerabino–Losing bet: Florida Lottery a tax on the poor

The state lottery functions as a voluntary tax with a disproportionate burden on the poor.

This is especially onerous in Florida, which is one of the most regressive tax states in the nation, according to the Institute on Taxation and Economic Policy.

Because Florida relies on raising money from sales tax and excise taxes on cigarettes, alcohol and gasoline instead of a progressive income tax, the poorest 20 percent of the population pay about 13.5 percent of their income in taxes, while the middle 60 percent pay 7.8 percent and the top 1 percent pay 2.6 percent, the institute found in a 2009 study.

The lottery makes that regressive tax burden even worse.

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Posted in * Culture-Watch, * Economics, Politics, Economy, Ethics / Moral Theology, Gambling, Politics in General, Poverty, State Government, Theology

13 comments on “(Palm Beach Post) Frank Cerabino–Losing bet: Florida Lottery a tax on the poor

  1. David Keller says:

    This is so typical of the American left. They have had this revelation in 2013, based on studies, of something that has been self evident to any one with a modicum of common sense. BTW, the Florida lottery was pushed by the LEFT as a way to put additional funding into education. That also never works.

  2. Capt. Father Warren says:

    [i]Because Florida relies on raising money from sales tax and excise taxes on cigarettes, alcohol and gasoline instead of a progressive income tax[/i]

    As a former resident of St. Pete and Orlando, one of the truest sayings I recall is that it was nearly impossible to find a person born in Florida because everyone came from somewhere else.

    And why do all those northerners [including hordes of Canadians] flock to Florida for retirement? Is it just the sunshine, the beaches and the water?

    Or is it to escape those wonderful “progressive income taxes” of the north for the pitiful “lack of progressive income tax” in Florida?

    Instead of confiscatory income tax rates, these folks vote to live where the tax is basically on consumption, not income. They vote with their feet. Unlike the county tax assessor, no one holds a gun to any resident’s head to force them to buy a lottery ticket.

    Whoever wrote this article was experiencing a liberal fantasy.

  3. Catholic Mom says:

    People don’t retire to Florida because of the tax structure. Actually, once you’re retired and your income is reduced, you’re better off living in a state that relies more on income tax and less on consumption and property taxes. People retire to Florida because its ungodly freezing in Canada and it’s warm in Florida and you don’t have to pay to heat your house 9 months of the year.

    Selling a fake “dream’ to poor people — that investing the little discretionary cash they have (or maybe it’s not even discretionary) into buying a lottery ticket with a 1 in a million chance of winning is the way to a better future is completely immoral. In my state, the TV, radio, and billboards are flooded with advertising from two different states telling you to play their lottery because “hey…you never know.” Then we also have legalized casino gambling and horse racing, although those draw a slightly more propsperous crowd.

  4. Capt. Father Warren says:

    [i]People don’t retire to Florida because of the tax structure[/i]

    Yes, actually they do. The myth that people flocking from up north to Florida are paupers is, well, a myth. People with pensions, 401k’s, and investments throwing off taxable interest & dividends, readily understand that places like New York and Illinois like to take 5-10% right off the top…..and that doesn’t happen in Florida [or Texas]. And for property taxes? Yeah they are pricey in the cities [but nothing like New Jersey!] but in Pasco County, and similar venues, they are a comparative bargain. Oh yes, and the Yankees are also delighted to learn that municipalities also don’t have “occupational taxes”. I recall a short stint in Bethlehem, PA where the city also grabbed a couple percentage points of my income.

    Oh, and did I mention the weather? Our little house in St. Pete didn’t even have central heating. But the window AC’s did run about 10 months out of the year.

    Taxes do drive behavior: in fact that is one of the reasons the IRS is used for social engineering!

  5. David Keller says:

    The Captain is correct again. My parents retired in Florida partially for tax reasons, and my brother and sister-in-law changed their residency while on active military duty, and have retired there almost solely because of tax issues. Almost everybody who serves in the military in Texas or Florida tries to change their residency because of taxes. Even in SC which still has an income tax, though reasonably modest, is being flooded with retirees, often military or of large means, because of tax issues. Many of them are what we call “half backs”. They retire to Florida but it is too hot and too far away from family, so they move half (the way) back, because we still have reasonably low taxes, great climate, beaches and mountains, but it is closer to the northeast.

  6. Catholic Mom says:

    I didn’t say that people didn’t retire to places where the overall tax bite is lower. Of course they do. That’s why everybody leaves NJ as soon as they retire. I said they didn’t select the state to retire to based on the tax structure. That is, I don’t think they’re saying “we’ll end up paying the same amount of tax in state A and in state B, but let’s go to state B because our taxes will primarily be in the form of sales tax, which we prefer to “confiscatory” income tax.” (As if the state isn’t confiscating your money every time you pay for something with money that you’ve already paid federal tax on.)

    You can easily structure your 401(k) so it doesn’t “throw off taxable interest and dividends.” Then you only pay taxes (15%) on your capital gains. You can have a huge capital gains income (vs.earned income) and pay only 15% in taxes if you live in a state that relies primarily on income tax for revenue. But if you live in a state with substantial property taxes and sales tax, you will have to turn around and pay tax on that money again. And if you’re an 80 year old widow living on social security, you’ll be paying the same taxes (property and sales) at exactly same rate as the millionaire across town. The only progressive tax is income tax. All others are regressive. That’s not “conservative vs liberal.” Those are just the facts.

  7. Capt. Father Warren says:

    The original premise of the article was that the lottery is a tax on the poor that makes the state’s overall tax burden more regressive.

    The lottery [whether a good or bad idea] is not a tax. No one puts a gun to the head of a lottery player. However, don’t pay your taxes and figuratively, the Government will do just that.

    So, I think David’s original point is that the article author was creating a premise to support a preconceived notion.

  8. Catholic Mom says:

    Of course no one puts a gun to your head to play the lottery. Just like the famous quote that “the law, in its majestic equality, forbids both rich and poor from sleeping under bridges.”

    Rich people do not play the lottery. Even the middle class is not a major supporter. Why would they be? They can realistically dream of owning a house, or buying a boat, or vacationing in the Carribean, or enjoying themselves in retirement, or sending their kids to a private school, or a million other things. But the vast majority of these things are infinitely out of the reach of the poor and the working poor. They can’t even *fantasize* about such things happening without a “deus ex machina” such as winning the lottery. And the people who run the lottery know this and relentlessly market this fantasy. Thus they are able to induce the poor, the uneducated, the hopeless, to part with a few dollars that they can so little afford to spare.

    Sure, nobody holds a gun to anybody’s head to get them to buy a lottery ticket. And nobody holds a gun to somebody’s head to get them to use drugs. But lottery promoters and drug dealers have a lot in common.

  9. Franz says:

    Actually, I once heard someone say that the lottery is “a tax on stupidity.”

  10. Sarah says:

    RE: “Rich people do not play the lottery.”

    Not true — plenty of rich people happily purchase lottery tickets. Why, I don’t know. It’s fun and they like it, I guess.

    I personally do not approve morally of the existence of a *state-run* lottery. I think it is wrong for the state government to be engaged in encouraging gambling.

    Plus, those who are harmed by the lottery are typically the desperate and the naive — and those two groups of people rarely have the freedom to play games with money.

  11. Catholic Mom says:

    I don’t know what you mean by “plenty” but I’ll be willing to wager $1k that it’s a tiny percentage. 🙂

    I live in a town full of very rich people and have worked in the major industry centered here (financial services) and have gotten to rub shoulders on a daily basis with a *lot* of rich people and I cannot recall a single one ever having bought (or at least admitted to having bought) a lottery ticket. Some of them go to Atlantic City and gamble because they’re suckered in by the sycophancy (if there is such a word) of the casinos that make it seem like certain kinds of gambling is the hallmark of the very rich, but these are mostly people who came from working class backgrounds and still get a kick out of flaunting their financial status. They certainly don’t need the money they win (if any) and they certainly aren’t spending more than they would for a night out in Manhattan, which they are well able to afford.

    On the other hand, the secretaries or janitors almost always have some kind of combined lottery pool going and it provides a ready source of fantasy/hope. I remember one guy telling me that he really hoped he would be able to send his daughter to college “if he hit the lottery.” He was praying for it, as it happens.

  12. Sarah says:

    RE: “I don’t know what you mean by “plenty” . . .

    More than “Rich people do not play the lottery.”

  13. Catholic Mom says:

    A statement in the simple present tense about a group of people such as “rich people do not play the lottery” is generally intended to mean that such behavior does not characterize the group as a class. It would be virtually impossible to say that no member of a class throughout history has ever engaged in a particular behavior.

    Let me put it this way, if the lottery had to depend on rich people for its revenue, I doubt it would be worth buying even one of those little machines that the numbers pop up on.