Steven Rosenfeld: Disturbing Facts Abour State Lotteries!

They prey on the poor  and trash the economy, and political leaders don't care! The following article is part of Alter net's series on poverty, Hard Times USA. State lotteries amount to a hidden tax on the poor. They eat up about 9 percent of take home incomes, from households making less than $13,000 a year. They siphon $50 billion a year away from local businesses, besides stores where they are sold. And they are encouraged by state sponsored ads, suggesting everyone can win, win, win! State lotteries, which once were illegal, now exist in moth states. What many people don't know about lotteries, is that they prey on those who can least afford it. Most people never win anything big, and 11 states raise more money from lotteries, than from corporate taxes. Beyond the moral, mental health or religious debates over gambling, lotteries are another example of how society preys on the poor, and the working class. Let's look at why state lotteries do far more harm than good, especially at the bottom of the economic ladder. 1. Legalized gambling is almost everywhere. Legalized gambling is available in every state except for Utah and Hawaii. This includes state lotteries, which are in 42 states, Puerto Rico and Washington DC. Lotteries were illegal for most of the 20th century, but that changed in 1964, when New Hampshire, a state without an income tax, re-instituted a state lottery. The first lotteries predate the American Revolution, but these mostly privately run efforts, were so corrupt, they were completely prohibited by every state in 1894. 2. They suck billions out of the economy. In 2009, $50.4 billion was spent on state lottery tickets and video kiosks. The government pocketed $17.9 billion of this total in 2010, which breaks down to 30 percent in profits, and 8 percent in administrative costs, including advertising. The rest went to prizes and commissions, to stores selling the tickets. Many corner stores could not remain open, without the income from lottery sales. 3. They are a tax from anti tax politicians. Tax averse Democrats and Republicans have increasingly been relying on state lotteries, to subsidize basic public programs like schools, instead of raising taxes for that purpose. In 11 states, Delaware, West Virginia, Rhode Island, Oregon, South Dakota, Georgia, Michigan, Ohio, South Carolina, Texas and Washington, the lottery raised more per person, than corporate income taxes. The long term shift in tax burdens from capital and corporations to individuals and their activities, is perhaps best illustrated by the rise of state lotteries, wrote tax expert David Cay Johnston, calling lotteries the most heavily taxed consumer product in America.