If I were to ask you what the most regressive tax in the United States is what would you say? The sales tax? It is indeed regressive but not the most. The most regressive tax is the lottery which taxes dreams that won’t be fulfilled. I don’t buy lottery tickets or go to the several Native American casinos within driving distance. I have never been to Los Vegas. When I retired I pulled all of my money out of Wall Street and purchased Certificates of Deposit and gold and silver.
So who buys lottery tickets and why does that make it a regressive tax?
What if I told you there was a $70 billion tax that the poor pay the most. You’d probably say that isn’t very fair. But that’s exactly what the lottery is: an almost 12-figure tax on the desperation of the least fortunate.
To put that in perspective, that’s $300 worth of lottery tickets for every adult every year. But it’s actually worse than that, because, as The Atlantic’s Derek Thompson points out, researchers have found that the bottom third of households buy more than half of all tickets.(bold mine) So that means households making less than $28,000 a year are dishing out $450 a year on lotteries. And, as a result, everybody else doesn’t have to pay the higher taxes they would if gaming revenues weren’t underwriting our schools.
I live in a retirement community and I know people who have lost their homes because of state run video poker. I see people who can’t afford enough groceries buying lottery tickets. I opposed the lottery when it was introduced in my state of Oregon because you could see this coming. I have twice voted against a constitutional amendment that would allow non Native American casinos in Oregon and up to this point the voters of the state have agreed with me. It was very predictable that state and local governments would become addicted to this tax that doesn’t look like a tax. Yes, participation is voluntary but it is still a tax on dreams that won’t be fulfilled.