The Poverty of Powerball
There are some taxes that folks just love. And in the last two weeks, people have been scrambling to pay one of them. I'm talking about Powerball.
America is in the midst of Powerball fever. And it's not hard to see why. The potential value of a winning ticket went from $40 million in November, to $800 million last Saturday night, to an estimated $1.3 billion as I record.
In interviews everywhere, people are fantasizing about what they would do with all that money. Many are admitting to buying tickets in bulk. Though in one a refreshing change of pace, a woman at a supermarket told a colleague that she wasn't playing because, "No one needs that kind of money."
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Well, she's definitely in the minority. People are lining up to buy, despite the fact that the chances of winning are astronomical: one in 292 million. In miles, that's more than three times the distance between the Earth and the Sun, what astronomers call an astronomical unit or AU.
Now, if all that was happening was a bunch of people throwing away a couple of bucks on astronomically-long odds, it wouldn't warrant comment. But that's not the only thing going on here.
As ESPN's Tony Kornheiser recently said on his radio show, it's clear that "the lure of easy money affects the segment of the population you wish it [that] it didn't affect."
He's referring to the disproportionate impact of state-sponsored lotteries on those who can least afford to play them: the lower-middle class and the working poor.
This disproportionate impact was the subject of a recent piece by Jordan Ballor of the Acton Institute. He cited polling data that confirmed lottery critics' worst fears: "The poorest among us," he said, "are contributing much more to lottery revenues than those with higher incomes."
How much is "much more?" One poll found that "people who played the lottery with an income of less than $20,000 annually spent an average of $46 per month on lottery tickets. That comes out to more than $550 per year, and it is nearly double the amount spent in any other income bracket."
And it isn't only the people at the very bottom of the income brackets: "Those with annual incomes ranging from $30,000 to $50,000 had the second-highest average — $24 per month, or $288 per year."
While that's half as much as those earning less than $20,000 a year, it's still a lot more than people in higher income brackets.
Ballor calls these state-run lotteries, which include Powerball, a "betrayal" of the citizenry. For starters, they're highly-regressive taxes on those least able to afford them. And it's certainly the only tax that's promoted through slick and nearly always misleading television and radio ads. And, Ballor adds, though lotteries are usually promoted as a way to pay for education and other human needs, "revenue is often diverted for new purposes through legislative and bureaucratic chicanery."
That's because it's easier to impose what's virtually a tax without the name on the poor than it is to ask citizens to accept higher taxes for what they want. And this gap between what people demand and what they're willing to pay for was what Philip Johnson once dubbed the "moral deficit."
In other words, people say they want smaller government, but often what they mean is that they're willing to sacrifice someone else's programs and subsidies, just not their own.
The explosion of state-government lotteries, and more recently, state-sanctioned casino gambling and slot machines is, in significant part, a product of this moral deficit. Let someone else pick up the tab.
Every once in a while, the payout grows so great that the rest of us will catch the fever our elected officials are spreading in our name, especially to our most vulnerable neighbors. The rest of the time, however, we're just content to let them pay the bills that we're not willing to pay ourselves.
As I said, when it comes to the lottery, the odds of winning are astronomical. But the chance of acting shamefully toward our neighbors is a sure thing.
Article posted here.
