State schools Superintendent needs a remedial course in microeconomics

State schools Superintendent Kathy Cox has a super duper solution that flies in the face of microeconomics to help solve Georgia’s budget woes for education.

Cox said during an appearance Friday on CNN that hiking the price by just 50 cents per [Georgia lottery] ticket could raise $350 million to help fill a massive hole left by state budget cuts in the last two years. Cox said raising prices would ensure K-12 got money while also preserving funding for the HOPE college scholarship and state’s prekindergarten program.

Sweet, because raising the price of something has always generated more utility for the consumer from each individual purchase, right? This, perhaps, comes from the same misguided thinking that believes raising taxes on tobacco sky high won’t cause the use of that product (and its resultant tax base) to dry up.

How about the price of a lottery ticket is cut? Perish the thought, I know, but the result might be a pleasant surprise for those, evidently like Cox, who also don’t seem to understand how tax cuts increase money flowing to government coffers.

Maybe she really isn’t smarter than a 5th grader, after all.

85 comments

  1. reaganrev4 says:

    Your article makes the idea behind cutting taxes seem so simple and easy to understand…BECAUSE IT IS! Im tired of these politicians that are too inept to get passed the fact that raising taxes on goods does not render more returns for government…in fact just the opposite

  2. ByteMe says:

    The last line is exactly what I thought when I read the original article.

    The paragraph before that is complete BS. You would think that people would have figured out by now that the Laffer curve stops working at a certain point. You can’t cut taxes to 0 and increase government revenue. Doesn’t work that way. You can cut them from, say, 70% to 30% and there will be a short-term bump in economic activity that will eventually return the level of revenue to its previous level, but it’s usually a few years before revenues return to the pre-cut level.

    But at a certain point, you just end up with lower revenue and the only way it returns to its previous revenue levels is through normal growth that would have happened even without the cut.

    • LoyaltyIsMyHonor says:

      Not only that, but 50 cents is not a make or break point for 99.99999999999999999999% of the people. I understand being philosophically opposed to something, but at some point you have to be realistic/pragmatic about things. This is why nothing ever gets done in government. People get scared and cling to their ideology instead of doing the really brave thing and actually act.

      • John Konop says:

        LoyaltyIsMyHonor,

        People who buy lottery tickets by them usually with a set amount of money, not one ticket at a time ie your example does not apply.

        In our current economy the average spend per person is way down in non-essential items. Ask anybody who owns a liquor store, restaurant… people are buying the cheap stuff.

        If we were in an up economy you might have a valid argument.

        • Jeremy Jones says:

          As an avid fan of the lottery, both because it is a tax on the poor and/or ignorant, and the fabulous example of probability, and the enjoyment I get out of scratching off a ticket once every couple of months, I will agree, if the ticket price goes up 50 cents, my nominal plays will decrease to nothing.

          I have never bought a ticket above $1. I believe they have $2, and even $5 scratch offs. I only buy the $1.

          Besides, who wants to wait in line to buy beer and cigarettes while a cashier tries to figure out how to make change when given $2 for a $1.50 ticket?

          Of course, the advantage would be, when buying one ticket, you will get the ticket, and two handy round devices to scratch it off. If you buy three tickets throughout the day, you will have enough of those devices to buy another ticket. (which will require one to figure out a different way to scratch it)

      • Mozart says:

        Are you saying/implying that if the price is raised on a lottery ticket to $1.50 each that the quantity demanded will not decrease?

    • Game Fan says:

      “You can’t cut taxes to 0 and increase government revenue.”

      Actually the laffer curve proposes that taxation at 0% provides zero revenue. Also the same for 100% tax rate. The real picture with extra fees and sin taxes, ect… is we’re talking about multi-layers of taxation. This stuff is simply a breeding ground for the dimwits who make a living off government growth.

    • Doug Deal says:

      The Laffer curve is not about future growth of the economy, it is about compliance with the tax as well as willingness to engage in current economic activity.

      We are very likely on the left side of the maximum and increasing taxes will increase revenue faster than people will drop out of the system. As you get to higher and higher precentages, however, the loss of one tax payer for that extra percent of revenue has a greater effect on the bottom line than extra revenue gained by the higher rate.

      Beyond the current receipts, though, is the issue of future growth. What Reagan did with lowering marginal rates was to increase economic growth, not gain benefit from the Laffer curve.

      Maximizing revenue for the current year is not a desireable goal, since it will have long term negative effects on the economy which will lower that potential of that maximum over time.

  3. John Konop says:

    You are correct a sin tax is usually used to discourage behavior. Agree or disagree with the policy, the concept is to raise taxes on alcohol, cigarettes, soda……the logic was to decrease the behavior to off-set social cost not raise revenue.

    Kathy Cox idea would create, for a consumer less chance of winning long odds bet with a consumer having less money to spend in a down economy. This would more than likely decrease revenue.

    This would be a good strategy if her goal was to decrease lottery spending because she is against gambling or people blowing their money on it. . But this does not make any sense if you want more revenue for schools.

    But after her failed math 123 curriculum, we all know math and logic is not something Kathy Cox is strong at.

    ……Records from the U.S. Alcohol and Tobacco Tax and Trade Bureau show that a 1991 federal excise tax increase created a slight bump in revenues in 1992, followed by four years of decline, from nearly $3.9 billion to $3.6 billion……

    BTW if you factor in the inflation ie product cost going up the above numbers is even worse.

    http://www.msnbc.msn.com/id/29865767/

  4. Mad Dog says:

    Pete,

    Laffer has been on this planet, in body, a long, long time.

    He’s never been able to show a mathematic correlation between any tax cut and increased government receipts.

    Ask him at the next Nobel Peace Prize ceremony.

    Just giving it to you straight on the Laffer curve.

    BTW the way, do you know the history behind using ‘utility’ in economics? Google it.

    • Game Fan says:

      The point of the Laffer curve is, it’s actually not based on any empirical data. It’s just an idea converted into a semi-circle. That’s what makes it so great.

          • Doug Deal says:

            Mad dog,

            It is not a formula, it is, however a proof. At 0% tax rate, tax revenues are 0 because something times nothing is nothing.

            At 100% tax, revenues drop to zero, since providing work has no return for the worker.

            At at least one intermediate point there is a positive non zero value. This means that at some point there is a maximum where revenues decline with increasing rate. Despite partisan beliefs, you cannot change the laws of mathematics, unless Nancy Pelosi “deems” it to be so.

            • Mad Dog says:

              LOL! Nancy Pelosi can’t even kiss my grits.

              You’ve provided examples without proof.

              Even at 100% taxation, people survive and evade taxation to do so. But, your 100% taxation scenario is vague. What is being taxed at 100%? Everything? What’s everything in your model?

              Answer: You have no model just an argument. You have talking points but no formula that models any real world set of conditions.

              Tell Nancy I said hello.

  5. Mad Dog says:

    John,

    There’s zero tax on breathing air. Yet, people give it up at least once in their lives.

    Just a humble reminder that taxes don’t prevent or cause everything.

    MD

    • John Konop says:

      Mad Dog,

      I have taking heat for my support of user fees for services to help pay for items in the budget. But for you to argue that a sin tax on products does not decrease the behavior is just statically wrong! In fact the debate from the left is usually ie like the soda tax debate is a way to decrease usage. And the right argues personal responsibility.

      • Mad Dog says:

        John,

        Arguments … can be won without using the truth. And the basic logic of all economic theory remains Ceteris paribus. “All other things being equal or held constant.”

        I’m not arguing an absolute. You are. And there are no absolutes in economics because it is not logical to assume ‘all other things are equal or held constant’ in a complex real world.

        And as to the right taking responsbility. We’re all waiting for that to happen say with ethics laws post Richardson….

  6. B Balz says:

    I wonder if Kathy Cox reads PeachPundit?

    Maybe some helpful person on the Ox cart could just shoot her this link?

  7. I’m also very familiar with the Laffer curve. Its very existence irritates me.

    Does anyone know of an equally infamous curve that depicts points of maximizing citizen revenue retention, while also providing for only legitimate government functions? One would think in a country founded on the principle of maximizing individual liberty and promoting the free enterprise system, we would have produced one.

    Maybe Cox could raise money by selling t-shirts that say “I <3 government schools.”

    • Game Fan says:

      Daniel
      I think you’re expecting waaaay too much from the Laffer curve. The point of the Laffer curve is to explain to folks how increasing taxes doesn’t necessarily correlate to increased tax revenues. Whether or not increasing government revenues is advisable would be an entirely separate subject.

      • GOPGeorgia says:

        Actually, the Laffer curve means sometimes tax reductions mean increased spending and therefore more taxes, but not always.

    • My point was merely “why would anyone in their right mind want to maximize revenue to the government?” I find that those that want to “maximize” government power are the ones to use such a tool. The only other group that I’m aware that uses it is monopolies and cartels like in the diamond industry who want to purposely skew the law of supply and demand in order to coercively maximize profits… and as stated, that irritates me.

      I’m still waiting for someone to provide me with a curve or formula that depicts maximizing revenue retention. If implemented, it would go a long way in assisting to maximize individual liberty that would further result in a thriving economy. But then again statist, both from left and right, would hate to give up power and control (and risk their own fortunes). The fact of the mater with statist, protectionism (and expansion of power) is their ultimate goal.

      I’m just saying…

      • Hi Daniel,

        The Laffer Curve was used to illustrate the rationale for lowering marginal tax rates. While this does increase government’s total revenue it increases individuals’ total revenue even more.

        It also shows that the left will use taxes simply to redistribute wealth and “punish” high income earners even to the detriment of the national government.

        Personally, I love the idea of maximizing individual freedom and reducing the size and the scope of government. And you probably remember that from the lengthy discussions you, Athens Republican and I had at Vesuvius.

        Anyway, the more freedom, the better off we all are until we reach total anarchy, which might be the Laffer Curve of Freedom.

        The X-axis is Individual Freedom with 0 being no freedom and 100 being maximum freedom. The Y-axis is Form of Government with 0 being totalitarianism and 100 being anarchy. The curve would begin at the Origin (0,0) and would be 0 freedom under absolute tyranny and the curve would eventually cross the line again (0,100) at complete anarchy (no government, no morality, might makes right). Somewhere along that curve with the proper minimum restraint (some mixture of lesser government and personal morality) would be maximum freedom. Like the Laffer Curve, it is impossible without experimentation to determine exactly where that “sweet spot” is located along the curve.

  8. Goldwater Conservative says:

    Well, first let me give a “shout out” to that non-social scientist Pete Randall that still doesn’t understand that economics is a bit more complicated than the simple supply and demand curves you learn in grade school.

    For one, Terry Dickinson at that newspaper in Jacksonville is not a economist either. He is a journalist…you people need to learn your boundaries.

    Secondly, we have been raising taxes on tobacco for decades. Thirdly, tobacco usage has actually increased over the past few years. Fourthly, are you certain that what decline we have seen in various “districts” is causally linked to taxes? Older generations smoke at higher rates and die at higher rates…that would definitely cause a decline in smoking. An interesting corollary, will smoking increase if we cut the taxes and prices? Probably not. Tobacco is one of those few products that people are rather educated on. Sure smoking is cool and addictive, but the public knows the hazards of smoking. It is not like the financial system or voting. This is a problem that you, Pete, and the rest of the modern media either not understand the difference between correlation and causation or rely on others not making that connection. Spotting correlation is easy, but making a causal link often puts a damper on your ability to control behavior and opinion (ie. kosher laws, miracles, the vaccine conspiracy, etc.)

    Most important, regarding the lottery, what utility is derived from purchasing a lottery ticket.

    Since you, Pete (and others), don’t get it, let me spell it out. p(B) – C + D must be greater than 0 if a “rational” human is going to buy a lottery ticket. that is, the probability (p) of obtaining a benefit (B), minus the costs (C), plus the non-economic utility (D) derived from the purchase must be greater than 0. Since the probability of winning the lottery is almost 0, the function becomes a simple calculation of C + D. The purchase of a lottery ticket is likely the result of ignorance and the inability to critically think. Adding a 50 cent tax on the lottery will not likely make a difference in the rate of purchase. Since a person is acting irrationally when the buy the ticket, how can one reasonably expect an insignificant increase to cause rational behavior? Cut the price or the taxes all you want, it is not likely to cause a surge in the demand for lottery tickets.

    The lottery is tax to begin with. It is a tax on the statistically challenged. I love the irony in using it as a tool to fund scholarships for higher education.

    Considering all of this, I really wonder how many of you really believe in conservative economic platforms. They are not scientifically based and are good only for quips and 30 second campaign commercials. The Laffer Curve, as mentioned by Byte Me, is something that is applicable to several aspects of economic regulation (and, yes, to an extent we should begin to view taxation as regulation…or, since many of you go by the Limbaugh/Hannity version of the word regulation, the word regulate means to make regular…as in to prevent combinations and gaming). “Before you tear a fence down you should find out why it was put up.” Mind you, I am retired, wealthy and not worried about the next few generation of my family, but when I hear the word deregulation all I hear is a faint pop of an economic bubble bursting a few years down the road. Nobody here benefited from the Gramm-Billey-Leach Act (well, I did a little)…but that is not the point. It was deregulation, you conservatives screamed hurray, a few years later we are spending hundreds of billions of dollars to fix an industry that completely lost its regularity (of course, the GBL Act did not cause the crash…it created a market environment in which speculation plays a bigger role than reality).

    • Mad Dog says:

      Gold,

      You mispelled Bliley. Yeah. I know. It was a typo and a cheap way for me to show I do read.

      Your post is very, very good. Too bad no one here read it.

    • Your equation leaves out one very important fact. Winning money by playing the lottery doesn’t necessarily always mean winning the jackpot. You can win various dollar amounts for certain combinations of numbers. So you need to change the probability to a bit higher than 0.

      • Mad Dog says:

        David,

        Nice point. There are several lottery programs. But, let’s assume we’re all on the same one (won). Mega Ball or Mega Millions type.

        With the odds so low at getting the jackpot, the odds of winning are effectively zero.

        I don’t know how it breaks down for the other amounts.

        I’d agree that a losing ticket is just about the only example of a 100% tax rate. And a winning ticket is also a 100% tax rate but the prize money has a variable tax rate.

        Under that, all tickets are counted as losers and the jackpot a separate taxable action.

        ?

        • I could’ve sworn Mega Millions, Mega Ball, Power Ball (or whatever the names of the games are) had the ability to win certain dollar amounts without hitting the jackpot. The only reason I know this is I bought a ticket for each of the two big games last week and looked at the possible winning combinations when I went online to see if I’d won anything. Did I expect to win? Of course not. Is $2 going to kill my budget? I would certainly hope not. I only buy lottery tickets once in a blue moon, and they’re usually scratch offs. I guess it was the $100M+ figures on each one of the big games that drew me to buy a ticket for each one this time around. Either way, I understand what you’re getting at. And I would also bet that many people who play the big games toss their tickets if they don’t hit the jackpot, not even aware of the lower payout amounts.

  9. bgsmallz says:

    Pete-

    You are so smug for being such an idiot. Lowering price doesn’t maximize revenue. Finding the equilibrium of supply and demand and setting the price at that point maximizes revenue.

    You are such a dumba$$.

  10. Lawton Sack says:

    There is no formula that can take into account human emotion. I have a friend that only plays the lottery when the jackpot gets over a $100 million. Absolutely no logic for him or others to do so, as the odds have not improved at all.

    Statistically speaking, more revenue would be generated by making it tougher to win the big jackpot (add more numbers to the drawing, for example). In gambling terminology: increase the house’s advantage. With less winners, larger jackpots would be generated, which would drive more people to purchase tickets. I would doubt that most people would even realize that their chances of winning had decreased, as they probably don’t even know how improbable winning is now.

    Of course, the legislators could really run with it and have state operated slot machines in convenience stores/grocery stores, open up state run casinos and horse tracks, etc. Atlanta could be the next Las Vegas.

    • John Konop says:

      Lawton,

      If someone buys 15 dollars worth of tickets they would get 10 not 15 tickets. And I do not think in most cases they pay the extra $2.50 for the tickets to get 15 like they did before. And I would argue in a down economy some people would buy fewer tickets even without the price increase.

      The problem with this debate is you cannot look at all tax increases via behavior like the same without looking at the product and economic time. Non–essential and average purchase drop in a bad economy. Last year the average ticket has dropped for Visa/MasterCard for the first time for credit and debit. Even Wal-Mart is having the problem.

      Wal-Mart’s new problem: Its customers

      ….Still, Wal-Mart shares fell 1.1% after the quarterly results were announced on Feb. 18.

      One explanation for sales weakness is deflation. The company said prices for groceries and consumer electronics continued to fall, causing customers to spend less on each shopping trip…..

      http://articles.moneycentral.msn.com/Investing/Extra/wal-marts-new-problem-its-customers.aspx

      • John Konop says:

        BTW that is why user fees would make more sense. Because it would match the purchase toward the service provided. And you would find out how much they really need and or want the service.

        • Game Fan says:

          On the bright side this is a great opportunity for small government fiscal conservatives to hold the line on taxes and fees and watch the size of government shrink before our eyes.

    • Doug Deal says:

      Lawton, it is quite reasonable. Gambling is not about unweighted odds, it is about expectation value.

      Assuming the odd of winning a lotter are 1:10 million, if the jackpot is $5 million, you have an expectation value that your $1 ticket will win $0.50. If the jackpot is $20 million, you have an expectation value of $2 and thus would average a profit.

      • Goldwater Conservative says:

        Doug, that is not correct.

        Like Pete, you are using math that is not complex enough. You need to create dichotomous variables that capture the odds of winning money (ie, odds of 4 numbers being correct, 5 numbers being correct, etc. and interact that with the expected value of your ticket when those conditions hold).

        That being said, if the odds really are 1:10million and the ticket cost $1, the expected value is conditioned on the odds of winning any money. In this respect, the expected value of your ticket approaches $0 (because no money is won if you get 0, 1, 2, or 3 numbers correct) for every addition number you must correctly guess to obtain any winnings.

        • Doug Deal says:

          GC,

          I was simplifying the probelm. I was using a hypothetical lottery with one payout. Provide me with the rules to my hypothical lottery and THEN you can tell me I am wrong.

          Your second paragraph is completely wrong. You have to consider the jackpot and use a weighted ROB (return on bet, I just made that term up) not just make comments that have no basis in mathematics.

          Perhaps, if you would ask sometime, I can teach you some advance math. But if this is any indication of your knowledge in other areas, we can now see why a nanny-state socialist like you would use the name Goldwater Conservative.

          • bgsmallz says:

            Doug-

            I actually think you are right and wrong. I understand the hypothetical and you’re correct in pointing out the obvious flaws in Lawton’s example, the increasing jackpot would correlate with an increased demand assuming the odds and ticket price stays constant.

            However, gambling isn’t about expectation value. If it were, the lottery and Vegas wouldn’t make a profit. Gambling is about people who are inherently risk takers, rather than being risk adverse or risk neutral, b/c the odds and price and prize by definition will most certainly never be risk adverse or risk neutral in anything that can be defined as gambling.

            “ahhhh…it’s a profit deal?”- Navin R. Johnson

            That leads us back to the stupidity and ironic hypocrisy inherit in Pete’s post-the idea that raising prices according to microeconomics means that revenues would fall.

            Assuming that lottery tickets are not a completely inelastic good, it’s true that demand for tickets should fall upon an increase in price. However, increasing the price most certainly could increase revenue despite lowering demand depending on the demand curve.

            A simple 5th grade example, if you will..

            If you can chose one of three prices to sell your widgets and you know from research that you can sell 100 widgets at a price of $10, 175 widgets at a price of $5, and 75 widgets at a price of $15, what should your price be?

            Truly, I’ve said this before, Pete Randall doesn’t have a clue of what he is talking about, he never directly cites a source, and he is an embarrassment to this blog.

            #1- Pete

            • Doug Deal says:

              For most people it is not. It is about poor memories and bad math. However, for professional gamblers it is. Even in Las Vegas, there are times when the odds (in reality “expectation value”) is in your favor. Generally these would be things like low limit poker tables, jackpot slots and video poker and some promotional (loss leader) games like single deck blackjack with early surrender.

              What you are talking about has more to do with psychology than math.

          • Goldwater Conservative says:

            Doug,

            I apologize. I synthesized your fake example with the real one.

            The math I presented, however, is not flawed. It might scare you to learn that Econ. 101 doesn’t explain the world…which might trigger that antagonistic name calling you conservatives never fail to resort to (you unAmerican fascist). Things change in the course of history. Newtonian physics explained alot and defined mathematics clear until the early 20th century. Conservatives, the like of you had you been around, were scared of the discovery of Quantum physics. In fact, the ripple it caused in mathematics has really only found its way into the social sciences over the last few decades. The crap you learn in Econ 101 is old. It is the math economists in the 18th and 19th century used and I am sure it scares you to learn that Adam Smith was theorizing under, what is now, flawed, or rather incomplete, math.

            The math, in the lottery example, does not need to get too complex. My example is sufficient and simple, although bgsmallz makes a good point that there can be no expected value in a game. Although, if one wanted to attempt a shot at calculating the expected value my formula would be sufficient and even in your “hypothetical” example, the expected value would be zero.

            In real life, as far as the lottery goes, as the jackpot increases and brings an increase in demand (if that is true) the odds remain the same but the payout is probably going to be less (because the total jackpot is divided amongst all winners whether they be jackpot winners or lesser winners).

            By the way, that nanny-state garbage you fell for means nothing. I am amazed that people like you vote, for one, but, more importantly, you fall for quips and fake “research” published by people without backgrounds in the fields they pretend to be experts in. “Sticking feathers up your butt does not make you a chicken.” You obviously know nothing about political or economic reality or theory. The fact that you called me a socialist and probably think Obama is a socialist is proof positive that you are “educated” by bad information and pundits rather than being guided by the intellectually curious and sophisticated. Stop being afraid of knowledge. The world is round, sickness is not caused by demons, witches are not real, performing CPR is not the same thing as resurrecting the dead, the stars do not determine your personality traits.

            • Doug Deal says:

              It’s interesting that you bring Physics into this discussion, as this was one of my two majors in college, the other being Chemical Engineering.

              My German Quantum Mechanics professor’s voice still rings in my ears everything I think of the term expectation value, as quantum mechanics is nothing if not about probability.

              In the lotto, more people buying tickets does mean a greater chance of sharing the jackpot, and the jackpot is not really worth the jackpot, since it the total amortized payout over 20 or so years, but there is an amount that the expectation value of purchasing a ticket is positive. If you do not realize this, stop commenting on porbability, as you have no idea of what you are talking about. Not that it has stopped you in the political arena.

              And again, as far as the word “Conservative” goes, you keep using that word. I do not think it means what you think it means.

              • ByteMe says:

                Only if set high enough. If not, then they’re just revenue generators.

                Example: a $0.20/carton tax on cigarettes raises revenue while doing nothing to change behavior. A $200/carton tax on cigarettes raises revenue and makes people think about whether it’s worth it.

                • Mad Dog says:

                  Byte,

                  Only works if the consumers budget is limited and there is only the option of reducing consumption at the new price, i.e. monopoly.

                  Love your example. And agree with it. Just adding to your point.

                  MD

                  • Mad Dog says:

                    John,

                    You never had a point. That’s why you couldn’t make it without mythical help from us and the Laffer Curve.

                    There are ways to get around the tax and not change the consumption rate of cigarettes. Consumer budgets vary. Other events may change invalidating your hypothesis, including offsetting taxes and credits.

                    Try to think outside the curve.

                    MD

                    • John Konop says:

                      Deal with facts!

                      ……Records from the U.S. Alcohol and Tobacco Tax and Trade Bureau show that a 1991 federal excise tax increase created a slight bump in revenues in 1992, followed by four years of decline, from nearly $3.9 billion to $3.6 billion……

                      BTW if you factor in the inflation ie product cost going up the above numbers is even worse.

                      http://www.msnbc.msn.com/id/29865767/

                    • Mad Dog says:

                      John,

                      Facts are facts. I’ll agree to that. But what were all the facts that could have or did change regulated sales of taxed tobacco products?

                      If I were a doctor … I’d say you had paranoid delusions that taxes control all behavior. Including your own.

                      If I were a fable writer, I’d say you are screaming wolf in the middle of a moonless night every time you hear a noise.

                      Since I’m a mad dog without sense, I just call you John Konop.

                      🙂

                    • John Konop says:

                      MD,

                      A 33% tax increase on a non-essential product would decrease revenue over time by any standard at looking at prior history. This is the issue at hand we are looking at. I never said a fee increase or tax increase decreases revenue every time. But any rational person who understands research methods and looked at prior history would not argue that this idea would have the opposite effect of raising revenue for schools overtime. And idea like this with a sharp increase would be used to decrease the behavior not increase the revenue.

                    • Mad Dog says:

                      John,

                      So you have documentation of how previous Georgia Tobacco Tax Changes have moved revenue up or down?

                      I don’t think so, Mr. John. I won’t compare federal taxes to local or state taxes.

                      And a dang news report ain’t proof of nothing. If it were, Bush was never in the National Guard and Obama was a Nigerian test tube baby.

                      Prove your facts before using your facts to support an argument.

                      🙂

                  • Mad Dog says:

                    John,

                    A 5 dollar tax on a 10 dollar item?

                    Horrible! Outrageous! Oh my GOD!

                    Ops. JOHN!

                    It’s a $1 tax on a $4 pack. You had me at hello.

  11. chefdavid says:

    As long as it makes the line shorter at the gas station I will be happy. Being on the State line when the jackpot goes up don’t even try and go in and get some coffee. I quit smoking a month ago and I can’t tell you how less stressful my life is for not having to wait 15 minutes as someone picks out their tickets. If someone had a store with a big sign “No Lottery Sold Here” around here I would shop there.

      • I don’t think there’s a ciggarette pumping machine out there (or at least one that’s legal in Georgia… seems to me they pulled out all the ciggarette vending machines out of Waffle Houses and everywhere else that I can think of…)

  12. Lawton Sack says:

    I have found the following quotes from an August 25, 2009 ABC News article (Link: http://bit.ly/1auzsN ) when the Mega Millions jackpot got up to $252 million. GA showed a 500% increase in regular sales. The odds stayed the same, but the jackpot was large enough to drive increased buying of tickets.

    “In Georgia, the lottery expects 6 million Mega Millions tickets will be sold there for this drawing. That compares to 1.2 million for Tuesday sales on the start of a prior jackpot run.”

    “In the 2 p.m. hour alone, 255,000 tickets sold in Georgia. That’s about 4,250 a minute and ticket sales tend to increase in the after-work hours.”

    “With jackpots of this size, you start to see people who don’t normally play a game like Mega Millions buying a ticket,” said Dominick DeMarco, a spokesman for the New Jersey Lottery. “They may notice it’s over 100 million, and they’ll say, ‘OK, I’ll take a shot at it.'”

  13. Doug Deal says:

    To be honest, I think we are pretty much going to get as much out of the lottery as we are going to get. Your typical lottery player is not some professional worker with a great deal of disposable income. It is more likely a lower income person who is probably already maxing out what they can already afford on tickets.

    If you buy a wad of 20 tickets each drawing, that is probably your limit. Upping the price to 1.50 would likely just make that person buy fewer so that he is still spending $20.

    The only way to get more people to spend more on the lottery is to get more people interested in spending money on it. I bet that is already at it’s saturation point, save the excitement of occassional big jackpots.

    If you want to bring more gambling revenue, how about licensing casinos? Combine that with sunday sales and maybe you will have enough alcohol sloshed morons to lose enough money to pay for states deficits.

    In any event, I am completely against the lottery, because it allows the state to swindle the people who can least afford it out of their limited resources by appealing to the worst in their nature. The state, with the lottery, is no better than a drug pusher, but somehow the latter is a felony with hard long time attached to it.

    • While I agree with your statements above, there is one thing I’m skeptical on, and that’s the part about getting as much out of the lottery as we’re going to get. From my understanding, currently the monies taken in from the sale of a lottery ticket is divided up. 50 cents to the state, 50 cents to the pool to be paid to the winner. (Just as an example… actual numbers may vary here.) However, let’s say there’s a 50 cent tax on top of that now to make the ticket price $1.50. That means for every ticket sold, the state now takes in $1, with only 50 cents going to the winnings pool. So sure, there will be fewer tickets sold, but the state’s income would increase.

      Now, that’s not to say that I’m in favor of adding a tax onto lottery tickets either. Personally, I think $1 is the right price point. Just like 25 cents for pay phones back in the day. Who wants to carry around an extra dime just to make a call. (Come to think of it, I can’t recall the last time I’ve even seen a payphone.)

      I would like to see the state’s monopoly on gambling come to an end and allow private companies to open casinos and horse tracks here.

      • Doug Deal says:

        If that’s how they do it then instead of raising ticket prices they would just need to adjust the payoff to 33% instead of 50. If they raised the ticket price they would most likely keep the payout the same.

        Really, though, these big games are multi state lotteries. I don’t see how one state can adjust ticket prices on their own unless they only do it for pick 3 and scratch offs.

        • Yep, they theoretically could adjust the payoff percentage. But I’m not sure who would do that… I’m really not totally up to speed on how the lottery is run, but I was thinking it’s run by a private corporation. As to who decides what percentage goes into the state’s coffers, I don’t have the foggiest idea.

  14. Three Jack says:

    figures konop would immediately advocate a backdoor method of increasing cost of government instead of finding ways to cut the bloatocracy.

    • John Konop says:

      Three Jack,

      It figures you would support something for nothing! A tax cut without proper spending cuts is not fiscally conservative it is irresponsible. We had this debate years ago when I pointed out this problem while you supported the above irresponsible policy. Who was right about it hurting our economy?

      A user fee is paid by people using the service. And we have services that need to be paid for. Unless we eliminate the service someone must pay for it. The something for nothing attitude by both sides is why we are in this mess! We need realistic adult solutions, not gut level politics that want an issue for political reasons over solving the problem.

  15. Three Jack says:

    konop, you are the one advocating higher fees to pay for more spending. i’m guilty of the opposite, lower taxes, cut spending to the bone. eliminate so-called services most of which can easily be handled by private companies.

    you really are wrapped up in the entitlement bloatocracy.

    • John Konop says:

      You are joking?

      You attacked me when I ran for office pointing out the problems with NCLB, Medicare Part D, Highway, Farm, government backed loans……..

      • Mad Dog says:

        Three Jack,

        I don’t think you’re right about Konop. I’ve not heard him say increase taxes, tag the taxes to specific new spending… etc etc.

        But you are right. You are guilty.

  16. Icarus says:

    I’ve pretty much stayed out of this one, but the economics of the case are real.

    While many of the comments here are from casual lottery players, the bulk of the lottery proceeds are from hard core players who buy frequently and in bulk.

    I read a while back about the GA Lottery Corp (and maybe another state or two) had to adjust the payouts of some of the scratch off games to make up for some larger than expected payouts in either Cash 4 or Fantasy 5 (let’s use that as the example, I don’t remember the deets, or even for sure if this was a GA example).

    Point is, they reduced the payouts on some games while still selling existing scratch off games.

    Guess what? These poor dregs of society that you think are too stupid to know the difference between a $1 lottery ticket and a $1.5o lottery ticket bought the old games in droves (the ones with the higher payout percentage) and left the new games on the shelves. Many of the games ended up being recalled because of few takers.

    Very few people ever “study” economics, but in real world, practical applications, even the least educated catch on fast.

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