- Days left
The Tennessee Legislature is looking to make life a little more difficult for the poor.

A bill is scheduled to be discussed at a committee hearing Wednesday, April 8, that would prohibit anyone receiving state or federal assistance, sometimes called welfare, from winning $600 or more in the state lottery.

However, the author of the bill, Rep. Stacey Campfield, told me in a telephone interview on Wednesday morning that a subcommittee didn't have time to get to it, so the meeting on it has been delayed about two weeks. I'll check back with Campfield then for another update.
The thinking behind the bill is that if someone can't afford the basic necessities and is getting food stamps, for example, from the government, then they shouldn't spend money on something like the lottery. On the other side of the issue, people are saying that the government shouldn't tell them how to spend their money. Here's a video from wate.com, a TV news channel in Tennessee:

The bill doesn't say anything about preventing the unemployed from winning big in the lottery. It just prevents people getting public assistance from winning big -- even if they have jobs.

Studies have shown that poor people spend a larger percentage of their incomes on lottery tickets than wealthier people. Part of the draw is a last-ditch effort to get out of poverty, even though the odds of winning are very slim.

Prohibiting the indigent from winning more than $600 would lead to those people not playing the lottery, which would lead to less money for the state, since the state keeps much of the money spent on the lottery.

A state fiscal review of the Tennessee bill found that lottery sales would drop by approximately 2.37%, or 147,403 fewer players, if the law is passed. Net lottery ticket sales are projected to drop by $23,972,100 in fiscal year 2009-10.

And here's a figure that amazed me: The state's review found that half, or 294,805 individuals, of the people who receive food stamps from the state buy lottery tickets. Half of those people are projected to stop playing the lottery if the bill passes.

If those people stop playing Tennessee will lose $6.4 million in scholarships and grants that it provides each year from its proceeds.

But for the remaining half of food stamp recipients, or 147,403 people, who would continue to play the lottery despite being prevented from keeping their winnings over $600, the money would go to the state. They'd be playing for the state.

The Tennessee Education Lottery Corp. reported to the state that approximately 11% of the awarded prizes are for $600 or more. So if half of the food stamp recipients continue playing, and thus continue donating their winnings to the state, the after-school programs would gain more than $1.3 million a year.

As of February, Tennessee has a 9.1% unemployment rate, leaving 276,312 state residents out of work. It's a population almost equal to the number of people in Tennessee who receive food stamps.

Hopefully a legislator won't try to expand the bill prohibiting large lottery winners to people who receive state unemployment checks. Being unemployed is already difficult enough, but being unemployed and poor would be a lot worse.

Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.AaronCrowe.net

Increase your money and finance knowledge from home

Building Credit from Scratch

Start building credit...now.

View Course »

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

TurboTax Articles

Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

Add a Comment

*0 / 3000 Character Maximum