It doesn't. Just headline gore.

Lottery payouts typically have two options: lump sum at half the value of the winnings or a 30 year annuity at the full value. So this headline assumes lump sum reward and cuts the face value on that alone, then does a bunch of other hand waving to get you down the next 58%.

News journals that are owned/advertised by anti-tax republicans love to run out the "lottery was taxed too high" story, specifically targeting people who fancy themselves future lottery winners. It's all bullshit.

It's not taxes... well not all of it. The lotto advertises its prize as the sum total of a 30 year annuity. Currently Powerball has an estimated Jackpot of 163 Million. You can take the lump sum up front though. At present that lump sum is 73.9 million. After you get that, then you get taxed on it, reducing it to probably something like 40-50 million.

Instead of taking out the lump sum, you can have it paid in installments, they probably asked for lump sum, thus they get a much lower value.

Then you can do the math of whether or not it's worth it to receive monthly payment or taking out the lump sum, paying off all your debts, then putting it into S&P 500 and drawing down 4% a year and never run out of money.

At 400 million, that's what, 16 million a year? Never have to work again a day in their life, can spend 365 days a week in a 5- star hotel at a 1000-2000 dollar a night a 250 thousand car every year and haven't even spent 1/16 of his yearly liquidation.

I think if they only advertised the post-tax number, there wouldn't really be a problem. Like, "hey, the jackpot is some amount, and after tax you could win 400 million"—that would be fine. As it is, they're kinda just building resentment for taxes in general by making your final winnings seem so disappointing, even though it's still 400 million.

I violently disagree with you.

Gambling and playing lottery is a method to take a risk and get essentially free money by doing nothing, other than taking the risk. Personally I think anything like this gambling related should be taxed up the wazoo. Definitely more than 50%. And that taxed amount should ideally go back to fund things like schools and stuff good for everyone.

Final note, if you ain't happy with 400M free money, you cray cray.

Or the winning amount should represent the money you get after tax just like in every other country.