by Elizabeth M Young

Created on: September 26, 2009

The idea of recovering welfare money is taken care of in California. In the event that a welfare recipient wins the big one, the income taxes will probably recover whatever they cost as welfare recipients! Considering that California does not tax lottery winnings, the state gets nothing immediately. California always reaps profit from any particular lottery, where much more comes in than is paid out in winnings.

California, by law, has to gives a nice chunk of the money to the schools. But one quarter of the winnings is immediately deducted from the winner's check, to pay the Federal Income Tax.

The smallest lottery amount in California is 7 million. Cash value is about 3.6 million, maybe a little more. So a quarter of the cash value, or a whopping 900 thousand dollars would be paid into the federal coffers right away.

Welfare recipients in California would have to have undergone major medical catastrophes in order to run up a 900 thousand dollar tab from their time on welfare in a state that has advanced welfare-to-work programs. As a result, in most cases, far more money would be returned to the federal, state and local coffers than the person received in benefits.

There are the taxes on houses, cars, and the other goodies that people buy when they win the lottery and add to the state, county and city tax accounts. Everything, except for non taxable food and other items, would be subject to one tax or anothe. That would be even more money for state, county and local sales tax coffers.

Aside from tax free gifts, any money that would be given to friends and family would be taxed at 15% for the gift tax. Double pay for Uncle Sam! Money that was already taxed gets taxed again as it transfers to other people in the form of gifts. When the wise and careful lottery winner dies, the estate tax can add even more to pay for the welfare years.

While it is stupid for people who are so poor that they have to depend on welfare in order to live, to be gambling at anything, the winnings are more than likely to replace the costs of taking care of them. Any ideas of fines or recovering money just because a person was poor seem to be punitive action that unfairly takes money, on top of the money that they already return to the people in the form of taxes.

In America, there is no punishment available for people who just happen to have been poor when they bought, or were given a lottery ticket, and there never should be.

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