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Please explain the Publishers Clearinghouse...
Jokes, Polls & Anything Else / 5:30 PM - Tuesday October 18, 2011

Please explain the Publishers Clearinghouse...

We watched a show last night called, 'How the Lottery changed my life' and they showed a black woman that won. She was married to a white guy. I'm only saying this to better describe the storyline- I'm not prejudiced. But she won The Pub Clearinghouse for 1 Million Dollars. It went on to say that 'After Taxes & FEES' her winnings were $250g. WTF??? Taxes & Fees ate up 75% of her winnings??? I would be SO pissed off... That's bullshit.

So, has anyone won the lottery and been hit with these 'Fees' they were talking about?

- Asked by 1carpediem1, A Life of the Party, Male, 36-45, Pittsburgh, Financial / Banking

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Prizes are usually the total of a 20 year anuity. A "million dollars" is $50,000 per year. But the actual value of such an anuity is only about $500,000. The rest of the million is interest it will earn from being invested for 20 years until you get it. Then you deduct about 37% for federal taxes, the maximum IRS rate. Then you deduct local taxes, another 10% or so. You are lucky to get about 1/4 of the advertised amount. They lie. All the states lie about their loteries. They never give the promised amount.

- Response by greenwind, An Intellectual Guy, Male, 56-65, Construction

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The really annoying thing about the taxes is that if a multi-millionaire won that same lottery he would have paid capital gains tax instead of income tax at a much lower rate.

- Response by wiserman, A Creative, Female, 56-65, Who Cares?

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Community Rating: Community Star

It's pretty standard.

Lottery winners get to choose whether to take their cash in a lump sum, or a fixed amount to be paid out over time. For example, she won $1,000,000, so she could get something like $50,000 a year for 20 years, taxed every year upon payment.

If she asked for as much money as possible up front, she'd only get half ($500,000), and then they'd tax the half.

$250,000 sounds about right to me. Of course, in a strong makket like it was in the '90s she could have taken that quarter-million dollars and put it into the stock market or real estate, and ended up with many millions if it were managed well.

The time-value of having a whole big pile of cash now, instead of many smaller piles doled out over decades, is why many people take the lump sum. Financial advisors would tell most winners to take all the cash as once.

If you take the 20 year annuity and then die before your whole million is paid out, your family never sees the rest of the dough that you (in theory) won.

You can't assign your ticket to someone else, like your young son or a spouse who is healthy if you are ill, aso if you want your familt to benefit from the win you take the most you can get up front.

That's one reason that the lottery just loves old people playing the numbers. The elderly winners either wisely take the lump sum (good for the winner, his family, and the lottery) or take the annuity and die before it's all paid out (great for the lottery). Old people are a win-win for the gaming corporations.

- Response by newyorker80, A Thinker, Female, 29-35

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I've never won anything in a lottery but I've thought about it.

It should be understood that you are going to pay a sh*t-ton of taxes and fees on it and race has nothing to do with it, however, the income you made during the year and the number of dependents you can claim and whether or not you have owned your home during that year does have something to do with it.

My mom has been single since my dad passed away almost 30 years ago. During that time, she made a decent living but had no dependents and her house was paid.
With no "winnings" at all, she paid a ridiculous amount of taxes.

If I ever win the lottery for $1 million, I expect to lose over half of it to taxes based on our income still that would be a nice chunk of change for someone to just GIVE ME and it IS extra and I wouldn't complain about the taxes paid.

This reminds of the time that Oprah gave everyone in the audience a car.
Well, that's very nice and all but most of those folks were BROKE and many of them didn't understand that they were going to have to pay taxes of several types on that car along with fees and many just didn't have the money to do so.

Nothing is FREE unless you are being "paid" under-the-table and even then it isn't free.
Someone knows and you are going to owe someone.

- Response by jenny12, A Career Woman, Female, 46-55, Other Profession

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