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Powerball Tops $500M, Should You Play?

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    About.com’s Kimberly Amadeo discusses whether the lottery is a tax on the poor.

  • Duration 3:55
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500 million dollars a half billion that is the powerball jackpot tonight people are lining up to hand over them -- Let's bring in Tripoli on the day of the about dot com guide to the US economy -- -- brought up front and they give you my opinion.

I think the probable and all of the state law offers only lousy deal portable want.

When you buy at two dollar ticket you immediately subject to a 50% tax because one dollop does not go to prizes it goes to administration and to the state.

-- it if you win.

That -- subject to another huge tax I think it's a lousy deal the best way of taxing -- people I don't like it.

And you say.

Fit it well.

On I hate disagreeing with you Stewart hello my.

But go ahead really -- if it really changed my heart but.

It's not a tax it's voluntary.

And so people can.

Decide to go -- are not decide to do it and one of the bad things about it is it is.

Very bad -- as a 175 million to -- The winning the lottery and you know people will win the lottery are played a lottery you know that's their choice and we can't legislate free well.

On the other hand they should also make some changes to their lifestyle for example if you play the lottery.

He should not flying a plane because the chances of being killed in a plane crash are 25 million to -- What would you do it -- -- a voluntary tax would you go around pay two bucks for powerball ticket will you do it.

-- Garth now now what both sides.

You know I shouldn't go to bed tonight because there are asleep on the floor because the -- that killing yourself are falling out of bed are -- -- the -- cut up.

But try this one.

If you win.

500 million dollars and you elect to have the payout -- over twenty years because -- you do that and you die in the first yeah.

-- S state.

Has to pay tax estate tax on the nineteen years worth of income which you haven't -- but which you would have received if you'd been alive.

You can go bankrupt doing that it's a lousy deal what do you say.

I agree it's a terrible -- that's why would never pay and one of the things I mean I've given you some frightening statistics one of the things that's really frightening.

Is that twenty to 30% of people surveyed.

Say that playing the lottery is their best plan for retirement now that's frightening.

Parable com.

What did you -- twenty to 30% things that best chance of the time that passed particular gap that's their retirement plan is playing the lottery.

-- you know if you took that two dollars and all our people say let's only two dollars so what difference does -- make if you took two dollars a day.

And invested it and he only got 5% back.

In seventeen years you would have 20000 dollars which actually adds up to something that's if you only get 5% a year you know well as I -- that.

You know -- stock market is supposed to give us 10% a year lets hope we get back to that one of these days with a okay so policy questions would you ban state -- offers.

I wouldn't because you know it does give the states -- some money there's 56 billion dollars that were collected through the lotteries last year now.

Unfortunately only seventeen billion went to the states but that's still seventeen billion at the -- sorely needs you know I certainly.

The agreement I think I think we've reached agreement yeah I do believe -- but that's because neither of us would buy a ticket.

But it is -- country attacks so.

All the people if they wish to do it can keep doing it.

And the state can keep doing it because they do make some money out of it and it is an efficient way of taxing the -- I think we're in full agreement Ali.

Yes we are being it is income redistribution from the port of -- rich guys precisely.

That.

-- Eller that was very good appreciate -- being with us thank you very much -- the -- Iowa.

Very much thank -- stores come back so.

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