RUSH: This past weekend, the Powerball jackpot was almost $688 million, divided between two winners, one from Iowa and one from New York.
So that’s $344 million each, right?
No, my friends, not even close.
CNBC looked at the winners’ tax bill. Now they can choose to take their prize as a lump sum or spread over 30 years.
Let’s say they choose the lump sum. They start with about $200 million. The feds take 24% off the top, and more when winners file their taxes. After federal taxes, the winnings are down to roughly $125 million each.
New York and Iowa state taxes bring winnings to about $107 million each. Then come local taxes. Bottom line: winners who started with $344 million, will pay almost 45% of their prize in taxes.
That’s a shame! Are you stunned, and maybe even feel sorry for winners who have to fork over so much, on a prize they won? Probable not, you think it still a lot of money
So let me ask this: Do you feel the same for people forced to pay those taxes on money they’ve earned? Not one. A lot of people pay the same amount of money on money they earn! How do you feel about that? You probable don’t care either because it isn’t you.