Are lotteries a tax on the poor?

Große Summen fließen jährlich aus den Lotterien in den Staatssäckel: ungerecht erhobene Steuern oder ein gerechter Beitrag für die gute Sache? Elisabeth Ribbans hörte zwei Meinungen.

YES!

Alicia Hansen is a writer at the Tax Foundation, a research group based in Washington, DC, where she has written two studies of state lotteries and their implications for tax policy.

What most people don’t realize — and what most politicians won’t admit — is that lottery revenue is an implicit tax revenue. It’s implicit because, certainly in the US, no government calls this money “tax”. But if tax is revenue collected by the state for general public services, such as schools and parks, then that’s what the lottery is. It’s a high tax, too: after prize money and administrative costs are paid, an average of 30 per cent of the total price of a lottery ticket goes to the state, which makes an implicit tax rate of 40 per cent. Worse, it’s a regressive tax, which means that, unlike taxes raised as a proportion of income, it hits the poorest people hardest.

Policy makers don’t want you to know it’s a tax, because no politician wants to be seen as someone who raises taxes. Yet there are now more than 200 state lotteries around the world, and, in the US, more and more states are becoming dependent on this type of revenue. In 2006, Americans spent a total of $57 billion (about €39 billion) on lottery tickets. In Britain, it was $5 billion. Defenders of the lottery say this is a lot of money for good causes. But is it a good thing when money for good causes is taken disproportionately from the poorest in society?

Research done for Congress in 1997 found that, while people from all income levels played the lottery, those with household incomes under $10,000 spent almost three times as much on lotteries as those earning over $50,000. It is equally alarming that, in 2005, the average American spent more money on lottery tickets than on reading materials and movie tickets combined.

Lotteries were banned in America from 1894 until 1964 — and in Britain from 1826 to 1994 — but now states depend increasingly on the money they provide. In places such as Oregon and South Dakota, lotteries bring in as much as 7 per cent of state revenue.

Most governments use lottery revenue for specific purposes; in America, it’s typically for education. That sounds like a bonus but it’s not. When politicians see cash arrive from the lottery, it’s cash they no longer have to raise by other, fairer and more transparent means. Everyone has the right to spend their money as they wish, but they should know what kind of deal they’re getting. If they enjoy the entertainment value of gambling, they should visit a casino. Casinos return about 90 per cent of stakes in prize money, compared with about 50 to 60 per cent for lotteries.