Now that the dust has settled on the big lottery winnings, it is worthwhile to see how the tax math works. Seen in the light of day, it is a great way for federal and state governments to triple tax this income and get even the lowest income households to pay it. So as media outlets shine a light on the lucky winner, consider what the tax looks like.
The bottom line when seen from a wage stand point is that 74% or more of the income used to play the lottery does not end up in the hands of the winner. The true winner is the tax man. Just one more example of tax collection and ethics taking different roads. If you have questions, please contact any member of the Baker Holtz team for assistance at 616-458-1835.