Great luck but astronomical taxes!

[Mark Latimour]

Originally Posted by news.com.au

Hurricane Katrina victim wins $100m

A MAN who lost two homes in Hurricane Katrina has won $102 million in Powerball.

Construction company owner Carl Hunter waited nearly four months to claim the prize. When he did, he became the highest Powerball winner in Louisiana's history, the Associated Press reported.

The 73-year-old said he bought the ticket while buying milk at a petrol station.

"I had some change, and one dollar was used to buy this ticket," Mr Hunter said.

He waited so long to turn in the winning ticket because he "wanted to wrap up some of his construction work and finish his outstanding contracts".

Lottery officials said Mr Hunter would receive $35.94 million after taxes.

Mr Hunter and his wife, Dianne, have no immediate plans on how to spend it.

The petrol station that sold the ticket will receive $26,000 for its sale. The station lost its roof and was looted during Katrina.

Thats 65% tax! I thought people complained about the UK having high taxes at 40%. In Australia you wouldn't pay any tax on this as lottery winnings are windfall gains, but 65% - that is out of control! Great story of reversal of fortune though!

[dancehallclasher]

Yeah that is surprising. Maybe he chose to take the lump sum instead of increments, I think they take more tax then.

[megadan]

Yeah, I really don't get how Americans are always bashing Canada for having high taxes. At least we have something to show for it. Theirs all goes to greedy politicians and they get nothing in return.

[MJ5150]

He must have taken the lump sum. Otherwise, that is some serious taxes.

A friend of mine won a new Mazda truck in high school, but could not afford the taxes to collect the truck. He won the truck from a soda pop bottle cap, so he sold the bottle cap to a guy he worked with.

-Mike

[manicbassman]

our lottery is tax free...

[tink9975]

If you take the lump sum, then you only get a fraction of the total winnings (on the order of 40 to 60%) then that fraction is taxed.
Lottery winnings are classified as unearned income and are taxed at a higher rate.

[mothmonsterman]

eh at 72, 32 million dollars should last him a while.

[jazzy grille]

Certin morans think taxes like this are a good idea..

Shame on him for winning all that money... Tsk Tsk.

[Aaron Saunders]

Oh god no.

He's only getting LESS THAN 40 MILLION DOLLARS?

This is a travesty.


(just sayin'.)

[gold_member_321]

Originally Posted by Aaron Saunders

Oh god no.

He's only getting LESS THAN 40 MILLION DOLLARS?

This is a travesty.


(just sayin'.)

Considering her won over twice that amounts it is pretty much complete BS.

[guy n. cognito]

Some of you don't get it.

The Powerball gives winners two options:

1. Take the winnings in a lump sum
2. Take the winnings over time, somewhere around 20 years.

If you choose to take the lump sum (which most do) you only get a percentage of the "actual winnings" because the number quoted is actually the total payout for the second option. The difference between the gross and the net is NOT all taxes, although taxes on these winning will be somewhere between 40-50%.

Jeez, a guy wins $36MM, and some of you still have to bitch about it.

[thesteve]

Originally Posted by guy n. cognito

Some of you don't get it.

The Powerball gives winners two options:

1. Take the winnings in a lump sum
2. Take the winnings over time, somewhere around 20 years.

If you choose to take the lump sum (which most do) you only get a percentage of the "actual winnings" because the number quoted is actually the total payout for the second option. The difference between the gross and the net is NOT all taxes, although taxes on these winning will be somewhere between 40-50%.

Jeez, a guy wins $36MM, and some of you still have to bitch about it.

Yep...I'd guess his $102 million payout ended up being a lump sum around $70 million. $36 million sounds right around what you'd expect after taxes.

[Phat Ham]

Originally Posted by thesteve

Yep...I'd guess his $102 million payout ended up being a lump sum around $70 million. $36 million sounds right around what you'd expect after taxes.

yep sounds right to me.

I would be pretty happy with $36 million in the bank. Think about it: Even in a savings account earning a measly 3% APY you're making a little over a million dollars a year just in interest. That's more than enough to live off of.

[manicbassman]

Originally Posted by Phat Ham

yep sounds right to me.

I would be pretty happy with $36 million in the bank. Think about it: Even in a savings account earning a measly 3% APY you're making a little over a million dollars a year just in interest. That's more than enough to live off of.

should keep you in Basses for some time then... heck, you'd be able to try those Ritter Basses...

[Mark Latimour]

Originally Posted by guy n. cognito

Some of you don't get it.

The Powerball gives winners two options:

1. Take the winnings in a lump sum
2. Take the winnings over time, somewhere around 20 years.

If you choose to take the lump sum (which most do) you only get a percentage of the "actual winnings" because the number quoted is actually the total payout for the second option. The difference between the gross and the net is NOT all taxes, although taxes on these winning will be somewhere between 40-50%.

I have only seen this system of lottery in the US. It seems a bit misleading to say that you win $100m when what you actually win is $100m paid over 20 year instalments (which actually doesn't have an NPV of $100m). Then add the taxes on top of it. If I was in the US I would be playing foreign lotteries!

[peterbright]

It's misleading on purpose. So you will buy more tickets. Florida's big lottery is paid out over 30 years. If you take the lump sum,and after paying taxes you receive approximately 1.1 million for every 3 million in the jackpot.

[Phat Ham]

Originally Posted by Mark Latimour

I have only seen this system of lottery in the US. It seems a bit misleading to say that you win $100m when what you actually win is $100m paid over 20 year instalments (which actually doesn't have an NPV of $100m). Then add the taxes on top of it. If I was in the US I would be playing foreign lotteries!

what kind of jackpots do lotteries in other countries have?

[MakiSupaStar]

Apparently I win the London lottery every other week. I must have incredible luck. By now I probably owe a small country's fortune in taxes.

[burk48237]

Originally Posted by Phat Ham

what kind of jackpots do lotteries in other countries have?

In Nicaragua, you cash a check or Nicaraguan money order for your One Million dollars in winnings. And you only have to send them a US money order for thirty thousand! I found out about it on the internets!

[burk48237]

Yeah the lotteries in the US are amortized like a life insurance policy. Most people take the lump sum figuring they'll "invest it". A couple of years later they start getting their welfare checks again. Their is a whole industry built on handing on loans to people who have large lump sum payments that are coming. It's mostly used for legal settlements, which is the most popular form of American lottery.

The US has relatively low income taxes, Under Carter they reached 78%. I believe the top rate is now 38%. But the government has other ways of getting your money. If you invest and decide to live off investments, you'll pay capital gains, and income tax on the money. If you start a business and incorporate, you'll pay corporate income taxes plus income tax.

Their is also the inheritance tax, that varies in percentage, but the problem is, it doesn't include liabilities if you inherit a business. In many cases a family member will receive a farm or other business, and find that after taxes and liabilities they lost money. At least their is now an exemption on the first million. The other thing thats nice is we pay income tax on our gross income, and THEN the medicaid and social security tax is deducted from it. So we pay tax on our taxes. And that doesn't even include state taxes. The one thing we haven't adopted from other western nations yet is a VAT. States can't do it, because it has to be done at every level of manufacturer. Paul and John were right.

The sad thing is because it's deducted from our pay checks, and we usually overpay and get a refund, the average worker has no idea how much they really pay.