MA: Mideast Contest Winnings Taxation Act (Statute)

[Inks.LWC Supports Chuck Hagel]

Mideast Contest Winnings Taxation Act

Section 1

1. Any citizen of the Mideast Region who wins a lottery, radio contest or any similar contest within the region is hereby subjected to taxation on their winnings.

2. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
• On any prize that totals more than $100,001 in value: 25%

3. Any prize that totals less than $500 shall be exempt from taxation.

Sponsor: 20RP12

[Jayhawker]

First, it'd be nice to know if there is a federal tax already implemented. In many RL states, there is a large federal tax, then a smaller state tax, if my memory serves me correct.

I can't remember it being taxed, and Marokai can't either. If it's not taxed on the federal level, which is a surprise, consider how left-leaning our Presidents and Senates have been, I'd tax the heck of it here at the state level.

Mideast Contest Winnings Taxation Act

Section 1

1. Any citizen of the Mideast Region who wins a lottery, radio contest or any similar contest within the region is hereby subjected to taxation on their winnings.

2. The taxation shall be:

• On any prize that totals less than $500 in value: 15% tax
• On any prize that totals between $500 and $100,000 in value: 25%
  
• On any prize that totals more than $100,001 in value: 45%
  
  

Sponsor: 20RP12

[Inks.LWC Supports Chuck Hagel]

I'm with Tmthforu94.  We need money... tax it like it's going out of style.

[ZuWo]

I am wary of introducing new taxes so I need to be convinced to support this bill. And if I eventually support this bill, I will only accept the tax rates in the original version of the bill. There is no way I will get behind tax rates of 45% in this case - that eats up almost the half of the prize a person wins!

[For Oklahoma]

I am wary of introducing new taxes so I need to be convinced to support this bill. And if I eventually support this bill, I will only accept the tax rates in the original version of the bill. There is no way I will get behind tax rates of 45% in this case - that eats up almost the half of the prize a person wins!

At the moment, we as a region need a balanced budget. I agree that 45% is rather high, but I don't think it can go a lot lower than that. Maybe 37% as a compromise.

[Jayhawker]

Here's a little quote of what the taxes are in America:

Lottery winnings of $600.01 and over are subject to Federal Withholding tax.  For winnings of $600.01, up to and including $5,000, you will be issued a W-2G form to report your winnings on your federal income tax form.  For winnings of $5,000.01 and over, your state's Department of Revenue removes the 25 percent federal withholding before you receive your winnings check (or, if it is an annuity, from each winnings check).  You then receive a W-2G form with each check to submit with your 1040 form to show that the 25 percent federal withholding already has been paid.  In addition to federal tax, your state will make additional withholdings for taxes, and most states will deduct other money that you may owe to the state, such as back taxes, child support, loan payments, etc.  The state tax withholdings are as follows:

Additionally, there's a 5% witholding in Illinois, 3.4% in Indiana, 4.35% in Michigan, etc.

http://www.usamega.com/powerball-faq.asp

We're either going to have to implement taxes like this, or we're going to have to make some very deep, painful cuts if you really want to balance the budget. You can't have it both ways.

[ZuWo]

Before we get too excited over these new taxes, we should try to find out how much money this will actually generate. Let's keep in mind that the beer tax amendment that we have passed recently only resulted in an additional revenue of $150 million - nowhere near as much money as we need to balance the budget.

[Gass3268]

I support any way we can get new streams of revenue, but I do agree with the governor that that we should see how much money this will bring in before determining the percentages. 

[shua]

I would assume contest winnings are currently taxed as personal income.

Does the region have a lottery?

[ZuWo]

I would assume contest winnings are currently taxed as personal income.

Does the region have a lottery?

I'll need to do some research in the wiki to find that out. Maybe someone who's been in Atlasia for a longer time knows more about that.

[Jayhawker]

I would assume contest winnings are currently taxed as personal income.

Does the region have a lottery?

I'll need to do some research in the wiki to find that out. Maybe someone who's been in Atlasia for a longer time knows more about that.

Actually, to my knowledge, no. I'm almost certain one hasn't been established since 2009, and having read through the statue a couple of times, I don't think it's there either.

[For Oklahoma]

Maybe I could add a section establishing a regional lottery?

[Oldiesfreak1854]

Before we get too excited over these new taxes, we should try to find out how much money this will actually generate. Let's keep in mind that the beer tax amendment that we have passed recently only resulted in an additional revenue of $150 million - nowhere near as much money as we need to balance the budget.

I understand the need for revenue, but I don't think that it's entirely fair to tax people's contest winnings.

[Is JCL in mushy sappy love]

I ran into this a few years ago and as a result I owed my state government a total of 1 USD. I'm confident it also lowered what I would've gotten back from the federal government. Personally contest winnings shouldn't be touched unless its a government based lottery.

[Jayhawker]

I ran into this a few years ago and as a result I owed my state government a total of 1 USD. I'm confident it also lowered what I would've gotten back from the federal government. Personally contest winnings shouldn't be touched unless its a government based lottery.

I actually agree - I didn't see the part on contest winnings and "other contests". That'd certainly be open to a lot of interpretation. I mainly want the tax for regional lottery.

[Oldiesfreak1854]

Mideast Contest Winnings Taxation Act

Section 1

1. Any citizen of the Mideast Region who wins a a regional lottery, radio contest or any similar contest within the region is hereby subjected to taxation on their winnings.

2. The taxation shall be:

• On any prize that totals less than $100,000 in value: 15%
• On any prize that totals more than $100,001 in value: 25%

3. Any prize that totals less than $500 shall be exempt from taxation.

Sponsor: 20RP12

[ZuWo]

Is there a need for a regional lottery? And do you think the Mideast could really collect a lot of money ("a lot" means several billion dollars because that's the amount of money we need to reduce the budget deficit in a meaningful way) by establishing a lottery?

[Jayhawker]

Is there a need for a regional lottery? And do you think the Mideast could really collect a lot of money ("a lot" means several billion dollars because that's the amount of money we need to reduce the budget deficit in a meaningful way) by establishing a lottery?

Well, in Indiana, I think a lot of the lottery money actually goes to education.

http://taxfoundation.org/blog/how-much-implicit-tax-revenue-did-lotteries-raise-fy2010

Here's a good thing on how much revenue is generated.  So yes, establishing the lottery would bring a lot - Here in America, I can assure you that there's plenty of folks who would buy a ticket every day, as I see it happen all the time!

[ZuWo]

So if it is the intent of the members of this body to generate a lot of additional revenue from a regional lottery this bill has to be amended since it's mainly the sale of lottery tickets that has to be taxed.

[Jayhawker]

So if it is the intent of the members of this body to generate a lot of additional revenue from a regional lottery this bill has to be amended since it's mainly the sale of lottery tickets that has to be taxed.

I'm not sure I'm following you...put a tax on lottery tickets? I'm not sure that's how it works.

[ZuWo]

Well, the link states that the money which the state generates by the sale of lottery tickets is an implicit tax similar to excise taxes. Thus, people who buy a lottery ticket are subject to a tax. In a bill which establishes a regional lottery we have to decide whether we want that. The question is: Should the state lottery merely be cost-covering or is it our intention to collect a lot of money by means of such an implicit excise tax?

[Jayhawker]

Well, the link states that the money which the state generates by the sale of lottery tickets is an implicit tax similar to excise taxes. Thus, people who buy a lottery ticket are subject to a tax. In a bill which establishes a regional lottery we have to decide whether we want that. The question is: Should the state lottery merely be cost-covering or is it our intention to collect a lot of money by means of such an implicit excise tax?

...

That's not what I'm saying. Unless I have just a completely botched view of how the lottery system works, they collect money off the sale of lottery tickets, then by taxing the winnings. I don't think there's an added tax on lottery tickets - I think it's just like the sales tax.

I may have to settle this by going down to the gas station and buying a scratch-off.

[ZuWo]

Exactly. A portion of the ticket price is essentially a sales tax - an "implicit lottery tax". That's what I'm saying.

[Inks.LWC Supports Chuck Hagel]

I ran into this a few years ago and as a result I owed my state government a total of 1 USD. I'm confident it also lowered what I would've gotten back from the federal government. Personally contest winnings shouldn't be touched unless its a government based lottery.

Why not?  It's still income.  Although that brings up the point that we need to ensure we don't double tax.

[Jayhawker]

Exactly. A portion of the ticket price is essentially a sales tax - an "implicit lottery tax". That's what I'm saying.

Well, yeah, I guess you could say anything you buy from the government is kind of a tax, like stamps.

There's actually someone I know pretty well who's job has to do with the lottery up in Indy. I'll shoot him an e-mail tonight.