One thing that you can guarantee with a lot of people that win some kind of lottery like Powerball or Mega Millions is that they will either do one of a couple of things with it: they will blow it all in a week, use it for some worthwhile cause, or they will try to make their lives just a little bit more comfortable.

Me? Half the time I forget that the lottery even exists. If it were not for the need to go put gas in my car I likely wouldn’t remember at all. Went years upon years without playing a lottery ticket.  Every so often my wife and I will spend a couple of dollars just so we can pay to have the conversation about our battle plan would be if we ended up winning.

The first part would involve dropping out of sight for a couple of weeks. No friends, no family would know about it if possible until long after the ticket was presented to the lottery office. That way we don’t suddenly develop a case of long lost cousins that are planning on starting a business.

The second part would be giving every member of our family that has been of some significance some money, but making them sign legally binding contracts preventing them from ever asking us for any substantial sum of money again. The third part of this plan would be to live like we have far less than we actually have. Never want to me one of those people that spends all their money in three years.

As Wednesday’s Powerball and Mega Millions drawing tops a combined $800 million, one thing is clear: the winner has already been chosen. That’s right. No matter what the pretty people on television tell you, in this drawing, like in every other, there’s always a pre-determined winner: Uncle Sam.

One person, two, or a hundred random strangers might walk away with millions of dollars, but as much as half of that is going to end up in the treasure chests of federal, state, and local taxmen.

Let’s say you win the $440 million Powerball all by yourself. You opt for the “one time cash” payoff, which is $278.3 million. Of that amount, the feds will take 25 percent right off the top. Their share is $69,575,000. But it doesn’t stop there.

You’re left with $208,725,000. Then there’s state tax. Depending on where you live, you’ll pay pretty handsomely to the states. On that $209 million payout, in New York, the state with the highest tax rate on lottery winnings, you’ll give them a cool $24.5 million. Other states, like California (surprisingly) and New Hampshire, have no taxes on lottery winnings.

Oh, and if you live in New York City, they’ll impose an additional 3.876 percent tax on those winnings, or about $10.8 million.

So that big $440 million winning lottery ticket could turn out to be worth about $173 million after the government has taken its share. Then you’ve got your family and friends to deal with – especially all the new friends and family you haven’t met yet!

For the feds, it just goes into the big IRS pot – money to be doled right back out for welfare checks, fighter planes, and research studies on bird watching.

Each state gets to decide how to spend their largesse. Education is usually where most of the money goes, but not everywhere.

Pennsylvania gets about $1.3 billion every year in lottery winnings and they spend $900 million on programs for the elderly. Wisconsin spends almost all of their revenue to lower property taxes, and Minnesota spends much of it on natural resources. In Arizona, the money goes to fund wildlife programs. Our family recently visited a place where hummingbirds gather in the thousands that’s supported by lottery winnings.

Not to mention that lotteries typically amount to a tax on the poor. People who are desperate or lower income (and can least afford it) are most likely to spend money on the lottery.

Your odds of winning are one-in-many million. They’re almost zero. But if you buy a ticket, they’re not zero.

So you have a chance – one in a billion, probably, of being the big winner. But for federal, state, and local treasuries, every tile they hold one of these lotteries, it’s a big payday.


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