Powerball Jackpot Taxes: How Much Government Would They Pay For?
The two lucky winners of the Powerball jackpot are a part of Powerball history. Of course, the winnings are subject to federal taxes, making the spoils a little less sweet. But since the President wants to tax the wealthy, let’s see how much taxing these new multimillionaires buys us in the way of government.
Let’s assume that the two winners who will split the jackpot take the estimated $379.8 million lump sum. After all, with President Obama’s call for a tax increase on upper income earners, a call echoed by Warren Buffett, these newly minted millionaires could face a 39.6 percent rate—not the current 35 percent.
Suppose they’re smart, though, and take the money this year. Then the federal government keeps $132.9 million and the winners keep $246.9 million—less whatever state and local taxes they will owe.
Total spending in fiscal year 2012 was $3.54 trillion. Put in other terms, the government spent an average $9.7 billion a day, $404.1 million an hour, and $6.7 million per minute. Do the math, and that $132.9 million in tax revenue would fund the entire federal government for a whopping 20 minutes.