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    Lotteries Are Really a ‘Disguised’ Form of Taxation - Professor

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    As the jackpot for Tuesday night’s multi-state Mega Millions lottery drawing stands at more than $1.6 billion - the highest ever in US lottery history - Americans have caught lottery fever.

    However, isn't the lottery really just another kind of tax? On Tuesday, Radio Sputnik's Loud & Clear hosts Brian Becker and John Kiriakou spoke with Richard Wolff, a professor emeritus of economics at the University of Massachusetts, Amherst, and founder of the organization Democracy at Work, about what the lottery is really all about.

    ​"There are several ways to go at this. And they all come to the conclusion that there is something downright perverse about [the lottery], and whatever romance or drama you find in it, you want to balance that with an awareness of the costs," Wolff told Radio Sputnik.

    "Let's start with the notion that you already have in your mind, and quite correctly so, that this [the lottery] is a tax. If you do a map of any major American city, and you superimpose on that map a transparency that indicates where lottery tickets are sold, and then you do another transparency that indicates rich and poor neighborhoods in that city, you very quickly notice something. Basically, the poorer the neighborhood, the more lottery tickets are sold," Wolff noted, adding that the lottery usually appeals to and draws money from the wallets of people in the middle and lower income groups in society.

    In fact, Wolff argues, government officials realized that fact a long time ago and have since used the lottery to shift tax burdens from rich citizens and corporations onto poorer people.

    "The people who run governments in the 50 states figured that out long ago. They discovered that when you tax people, they get angry. But if you tell them, ‘I'm going to take some money out of your pocket, but I'm going to give you a chance to become a millionaire,' they part with their money and enjoy the process," Wolff said, also noting that the odds of actually winning the lottery are less than 1 in 300 million, which means ticket buyers have microscopic chances of actually hitting the jackpot. 

    "It's simply a disguised form of taxation," Wolff added, stating that the idea of a lottery existed in European countries way before it was adopted in the US as a substitute for taxation.

    There's also another problem with lottery, which is that it is a "job-destroying redistribution of wealth," Wolff said.

    "You're taking money from lots of people [in a lottery]. That's money they're not going to spend on food, clothing, shelter and all the other things that provide jobs. We're taking that money away from millions of people and giving it away to one person. And here's what we know in economics, that one person isn't going to be spending it all, because you literally can't. A large portion of that money is going to be saved, not spent on food, clothing and shelter, [which all] create jobs."

    "So this is a job-destroying reconcentration or redistribution of wealth. Taking a little bit from many and making one person fantastically rich. This is not not good for the overall functioning of the economy. That ought to make people question before they fall into the romance of this sort of thing," Wolff continued.

    When people inevitably lose interest in the lottery, governments have to "do something to hype it," Wolff explained. 

    "One of the things they [governments] did a while back was they started taking out paid advertisements. Let's be real clear: that means part of the money that you spend to buy a lottery ticket is not going to the government to do useful social services, and it's not even going to the winner of the lottery. It's going to pay for billboards on the highways and ads in the newspaper to get you to buy the ticket, and when that wasn't enough, they raised the jackpot to be able to get those headlines, because that will get people's attention."

    "I see a society that is condemning the vast majority of people whose jobs and incomes are insecure and insufficient. And as a torture to people who are not being given the income they deserve, they [governments] dangle the dream in front of them as if to almost reinforce the notion, ‘You're never going to escape from the position this society imposes on you unless you get the 1 out of 300 million chance to suddenly get wealth and freedom,'" Wolff told Radio Sputnik.

    "It underscores the injustice and inequality of this society by making this escape so far out of reach. It has an ideological function in that kind of way," Wolff concluded.


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