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Comment by tsotha | Hacker News Reader

1) It's not a tax. The IRS does not start sending you nasty letters if you don't play the lottery.

2) It's not fraud. Gambling is not fraud.

3) Yes, it would be illegal for you to set up your own lottery. But the state does a lot of things you would be arrested for doing, so that's not a very compelling argument.

Furthermore, a lot of people get genuine enjoyment out of playing the lottery. Who are you to say that's not worth the cost to the people who play?

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I think OP is saying the money used to buy the tickets is taxed, then the payout is taxed again (at a higher rate). Not that the lottery itself is a tax.

Not defending the double taxation, but I just wanted to point out that it's not limited to the lottery. We are taxed on what we earn (multiple times even: State taxes, Federal taxes, FICA, and municipal income tax in some places). Then we are taxed on what we spend (sales tax). Sometimes the state gets to tax the same transaction twice or more; if I sell a car to another person, I pay income tax on what I get, and she must also pay title tax, which here in Georgia is 6.5% of the value of the car. If I buy a car from a dealership, I pay sales tax as well as title tax.

Pretty much all tax systems are double-dipping, corrupt cesspools. But what's the alternative?

The fraud: the government is using its advantageous position to aggressively market a get-rich-quick scheme that has a virtually zero chance of ever getting you rich. You could play a million times and not win. It then benefits from direct profits and taxation of winnings. This all has demonstrably negative effects on public health in the form of addiction and exacerbation of poverty.

I'm skeptical this has any effect on poverty. Poor people who buy lottery tickets wouldn't spend the money on job training if they couldn't buy lottery tickets. They'd find a bookie and bet on sports, or they'd play the horses.

And I don't find your argument characterizing lotteries as fraud persuasive in the slightest. People who buy lottery tickets are well aware they're chances of winning are pretty close to zero. Yes, they have to pay taxes if the do win, but that's not exactly an overriding concern.

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