Lotteries: A Predatory Tax Regime

I play the lottery now and then, by which I mean maybe once every year or two. I like to think I might win, but of course don’t entertain any illusions that I will. It’s more of a fun social activity to take part in a lottery pool at work, or among friends.

But the lottery isn’t that way for everyone. Lotteries bring in billions while preying on the poor. They are touted as helping education funding, but once lottery funds pick up, it gives state legislators an excuse to cut taxpayer funding.

This is an obvious result of pursuing policies down a path where there is no active constituency to resist them. Nobody likes taxes, and the wealthiest fight them harder than anyone. This makes raising taxes–indeed, even keeping them at the same level, in some cases–a tough sell. There is constant pressure to cut spending at the state level, and as more and more states come to be dominated by Republican governors and legislatures, state tax coffers are likely to keep shrinking. The shortfalls have to be made up somewhere, and that’s where lotteries come in.

Lotteries have grown dramatically in the US, as the links above illustrate. In large part, this has been to replace the money cut by Republican state and local governments. This burden is shifted onto the poor because, in addition to the myriad problems poor people face to begin with, they also suffer a lack of strong political advocacy and representation. Pragmatically speaking, this makes logical sense: poor people tend not to vote, they don’t have money to donate to political campaigns, and are too focused on immediate concerns of survival to engage in significant political organization. This means that politicians, by and large, both have the luxury of not caring about poor people in general, and possess the benefit of being able to push through policies that disproportionately harm the poor without facing much in the way of resistance. This seems to be the case for lotteries, as well.

For many poor people, lotteries represent a path out of poverty, despite the astronomical odds against winning a significant jackpot. Every day, I see people on disability and other government benefits, people who are clearly quite poor, spending a large share of what few dollars they have on lottery tickets–scratch-offs, quick picks, and the like. I don’t blame them and I’m certainly not resentful. The chance of a win offers a priceless ray of hope for people who see no other way out. For state governments to prey on this by offering the false promise of a multi-million dollar payout is obscene. For state governments to transfer their tax burdens onto the backs of the poorest and most vulnerable at the behest of more monied interests should be criminal.

The lottery can be a fun exercise–a cheap little bout of gambling and fantasizing about a better future. But the reality of the situation is far from hopeful, and the slogans imploring us to “play responsibly” sound so cynical with the hands of the government outstretched, more than happy to snatch the last dollar from pockets of those who need help the most. No one is forced to play the lottery, of course–it’s a choice. But it is also our choice as to whether we fund state activities justly and fairly, through a sensible tax regime, or rely instead on predatory lotteries, regressing as much of the burden as we can onto the poor.

Photo by Lisa Brewster

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James
James runs this blog and likes to write about society, culture, politics, science, technology, social justice, and pretty much anything else. Rumor has it people read his posts sometimes.

1 Comment on "Lotteries: A Predatory Tax Regime"

  1. I grew up with both parents buying at least one lottery ticket every day, and what justified their continued lottery spending to them was that every few months they’d win a hundred dollars. My experience of seeing them continually justify it with the gambler’s fallacy has given me extreme distaste for ever purchasing lottery tickets or scratchcards myself. I am not judgmental toward people who suffer from this addiction. But I find it very upsetting to be in line at a store behind someone buying scratchcards or lottery tickets, because of my experience of the time (maybe more than once?) when my mom literally started screaming and hitting me when I turned off the lottery number announcement so she missed it.

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Lotteries: A Predatory Tax Regime

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