I always hear that if you win a million dollars you only get about half that.
WTF, why is it so high, half my check wont go to the govt, it should be the exact same principal, all income you make should be taxed on the same scale.
2007-10-27 04:28:38 · 11 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I did not win the lottery, it was just hypothetical
2007-10-27 06:25:35 · update #1
Because the income tax rates are graduated. They vary from a low of 10% to a high of 35%. Then you have state income taxes on top of that, and even local income taxes in some locales.
If you had a $10 scratcher win it wouldn't likely affect your tax bracket but if you hit one for millions you'd certainly max out the marginal rate at all levels.
The flat rate tax you a proposing would be a massive break for the wealthy. However when you give one group a break you either have to cut services or transfer the load to another group. That would leave it up to the poor or middle class to support YOUR massive hit. Sorry, Bud, but I have no intention of doing that!
If you've had a major lottery win, quit your bitching! I'll happily trade cirumstances with you -- and laugh all the way to the bank!
Well, if you didn't win the lottery, what the hell are you complaining about?? Sheesh! I'd happily hand over the 39.5% that a $10,000,000 hit would cost me as I'd still be left with $6,050,000 that they couldn't touch.
2007-10-27 06:08:35 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
The total taxes on lottery winnings are less than if you earned the same amount at work (there is no social security or medicare tax on lottery winnings, only on earned income, and the income taxes are the same). The maximum federal income tax bracket is currently approximately 35%, and usually at least 39%. The maximum combined state and local income tax bracket varies by location, but is sometimes over 10%. For very high-paid persons in some places, over half of their income from work (not including stock options or 401K contributions, etc.) goes to the government.
2007-10-27 09:05:16 · answer #2 · answered by StephenWeinstein 7 · 0⤊ 0⤋
If you were making a million dollars at your job, then the same amount of that would go to federal income tax as if you won $1 mil on the lottery. It sounds high because presumably you don't make that much, so don't pay anywhere near what someone pays who DOES make that kind of money.
2007-10-29 12:02:55 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
You purchased the lottery ticket with after taxed income. What value did the Federal government play in the dollar you spent? Should not be taxed, being that you were already taxed when you earned that dollar.
2016-01-10 09:43:08 · answer #4 · answered by CocktailCpl 1 · 0⤊ 0⤋
Lottery winnings are taxed as ordinary income. If you hit it big you pay the top rate just like you would if you had a megamillion salary.
2007-10-27 06:00:20 · answer #5 · answered by Anonymous · 1⤊ 0⤋
hbgcxcxc
2014-05-23 11:36:10 · answer #6 · answered by ? 1 · 0⤊ 0⤋
tax rates are based on the amount of money involved, a large loto winning will place in the highest tax bracket and thats around 50 percent.
2007-10-27 04:38:01 · answer #7 · answered by Jan Luv 7 · 0⤊ 0⤋
Because it's a windfall gain for a person and if that country's economy has progressive tax system then naturally it will be high...
2007-10-27 04:32:47 · answer #8 · answered by Prasun Saurav 3 · 0⤊ 0⤋
because the government has no mercy upon your feeble little soul.
you are nothing more than a slave to the elite.
they will rob you until you are dry.
3 hours of your average working day goes inside the federal government's pockets.
2007-10-27 04:37:24 · answer #9 · answered by Anonymous · 0⤊ 2⤋
It depends on whether you take it as a lump-sum or as an annuity. Its gambling income.
2007-10-27 04:36:49 · answer #10 · answered by Anonymous · 0⤊ 1⤋