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352 sats \ 12 replies \ @Scoresby 4 Apr \ on: The economics of American lotteries econ
My dad always said it was just a regressive tax.
In my country, the lottery was created with the aim of being an indirect tax, so your father is right.
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My uncle always said lotteries are a tax for people who are bad at math.
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My dad always said it was just a regressive tax.
Except that it's voluntary, so not actually like a tax at all.
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No. Sales tax is the state intervening as a third party in what would otherwise be a voluntary transaction. The lottery is just a service offered by the state that people willingly take part in. The state is inherently one of the parties to the transaction, not an intervening third party.
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That's a good distinction: intervening versus one side of the transaction.
If my municipality runs the water system and bills me for accessing it: not a tax.
If the municipality maintains the roads and charges me for it by adding a cost to gasoline - tax.
The indirectness seems to be important in what we call a tax.
Toll road - tax or not a tax?
Even better: if the state sent me a bill every time they dropped a bomb on some shmuck half a world away - not a tax.
If they make my employer give them some of my income to pay for it - tax.
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If the state prohibits other people from running lotteries, then it does become something like the situation with state utilities: not a tax, but a different type of property infringement. I would put a toll road in this category, since it's the state's road.
To be clear, I don't like any of this stuff, but the state offering a luxury good (lottery) instead of it being privately provided is very different from a tax.
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Taxes suck. So do must of the ways states generate income because they are tricky.
I'm okay with calling state-run lotteries taxes because it amounts to the same thing: squeezing their citizens for money. Whether it's by taking advantage of the citizens who are too dumb to resist (lottery) or too afraid to resist (income tax) is the same to me. It's the same kind of move as calling inflation a tax.
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It's the same kind of move as calling inflation a tax.
Yeah, that's a little bit inaccurate to, since we don't have a right to a particular amount of purchasing power.
taking advantage of the citizens who are too dumb to resist (lottery)
I don't want to grant this, because so much of the justification for using state power is that they need to protect us from ourselves, because we're so stupid.
In a free society, people would spend their money stupidly. Some of that would be on things like lotteries. Absent state protectionism, there would be a lot more competition though and the odds would be much better.
We are either free people, in which case our choices are our own, or we aren't and our choices are someone else's.
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Everything hinges on this idea of voluntary.
Taxes are compulsory therefore anything we do voluntarily is not a tax.
It is voluntary to buy a lotto ticket.
It is not voluntary to pay a tax on alcohol.
I don't see the difference between a state saying only we offer lotteries and a state saying you must pay tax on alcohol.
The only way I can avoid paying the tax on alcohol by not buying it.
The only way I can avoid the tax on lotto tickets buy not buying them.
I don't need either to survive.
Yet surely you would say sales tax on alcohol is a tax. So why not the lottery?