Powerball Problems.

So at least three winning tickets were sold to the $1.6 billion Powerball lottery in the U.S. The feds take about 40% off the top in taxes.

Now the winners (so far) bought their tickets in Florida, Tennessee and California. That’s important because they are states that do not tax lottery earnings. (It would have been the same if a Canadian had won. We would have paid 30% in U.S. withholding taxes but nothing here.)

Somebody did the math and here’s what they came up with: If there was a single winner and they opted for a lump sum payment (as all but four recent big winners have) they would have grossed just over $950 million. Of that, the winner must pay $368 million in federal income tax.

But split this sucker three ways and we’re looking at $320 million-ish before federal taxes which are just shy of 40%. So the winner walks away with about 128 million dollars. Life changing, certainly, but funny, it’s sounds a little petty cash when compared to the $1.6 billion everyone’s been talking about. For instance, the California winner might want to pick up new digs. But this one home would take just about all his/her cash!

Back when it was $1.6 billion people were talking multiple cars and fleets of jets and private islands and making more than enough to match the GDP of some Caribbean islands.

Everything is context. $20 is a fortune to a starving man.

 

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