We recently released a two-part podcast about Prize-Linked Savings, which are typically bank accounts or government bonds that shave a bit of interest off the top and pool together that interest to award regular big cash prizes to random account holders. The idea is to offer the thrill of the lottery with the principal-retaining properties of a savings or bond account.
A reader named Byron Lee, a “self-employed computer consultant and wannabe fiction writer” from Oak Park, Ill., just wrote in with his own lottery idea:
Years ago, I wrote my congressman about having a tax lottery. Taxpayers could direct a maximum of $5 of a tax refund for five chances in a random drawing with one winner per state. After operating expenses, all of the money would be awarded tax-free. Optionally, some percentage of the money could be donated to charity (or a group of charities). While not promoting savings, it would I believe add a little fun to paying taxes. Still another version of this plan is to automatically enter all taxpayers with no individual contribution. Each winner would receive $1 million tax free. Of course I never heard anything from my congressman.
Hey, they’re probably tearing up the tax code anyway in the next couple years – maybe they should toss Byron’s idea in there while they’re at it?
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How about a tax-holiday lottery – the winner never pays taxes again. Buy-in could be based on a percentage of your tax bill.
…and the winner will get $1 per year for a million years….
@ #1. your idea does not work, unless you stipulate that you never pay taxes so long as your stay within that tax bracket.
if this was not a provision ppl could take advantage, pool their money under 1 person and pay less tax.
I like your idea though. creativity is what the USA needs to keep the money coming into the system
Lottery? If you want to spice taxes up, what about having a manhunt? You only have to pay if the taxman can find you and hand you the bill personally.
By far the best lottery idea I have ever seen. The “Speed Camera Lottery” – search for it on YouTube. The video explains it the best.
Or you can find it on the VW site: http://www.thefuntheory.com
Sadly, not everyone gets a tax refund to buy up to 5 tickets with.
So those who owe taxes, are they saddled with the option to give up to $5 towards a chance to be audited?
The UK has run a related system called ‘Premium Bonds’ for decades.
They don’t pay interest, but at least you retain the principal as well as get a lottery ticket.
http://www.nsandi.com/products/pb
How about 10 lottery tickets for every return filed, and take one away for every error the computer spots: missing SSN, unmatched w-2, undeclared 1099, math error, etc? People hate losses more than they love gains, thus, taking away tickets is more incentivizing than giving them.