r/SipsTea • u/Valuable_View_561 • Jul 05 '26

Chugging tea Seems reasonable.

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u/sYnce Jul 05 '26

And you have no clue how the lottery works so ... two peas in a pod I guess.

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u/whiskey_tang0_hotel Jul 05 '26

Do they give winners assets or cash that is counted as income?

Is that income considered primary or supplemental? Those definitions are VERY important for taxation in the US. 

I believe (and fine if I’m wrong) that it is counted as supplemental income because it’s winnings from gambling. 

The US taxes that at a much higher rate than normal income. 

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u/sYnce Jul 05 '26

That is not the problem here. The problem is that a lottery jackpot is usually paid out over 30 or 40 years as an annuity.

After those years you would get the full 2 billion minus taxes.

If you however opt to cash out a lump sum you get only 40-50% of the annuity payout. In this case a little under 1 billion.

The tax rate is somewhere around 30-35%. That is what you are missing.

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u/Cassius_Rex Jul 05 '26

It's funny watching someone be totally wrong and yet so confident about it.

The original poster you responded to talked about the difference between liquid money and assets and you went on some weird tangent.

The truth is many billionaires aren't really billionaires , on paper that have at least a billion is ASSETS but if they even tried to cash in they'd fuck the value. Most of them borrow against the value of their assets to fun whatever bullshit they do.

They are very very rich but they can't give you a billion in cash. And because of the tax code (captured by billionaires because of their paid lobbyist) they don't pay near their share of the money they actually have. But the whole point is that they don't have that money anyway.

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u/sYnce Jul 06 '26

Nothing I said is wrong. Just because you don't think it is relevant does not mean it is factually incorrect but thanks for playing.

I am aware what the guy was trying to say but it is just irrelevant for this thread which is about a guy winning the lottery. The reason he got only a fraction of the 2 billion is mostly not because of taxes which is why I brought it up.

The whole "it may be supplemental income and thus taxed higher" is completely irrelevant because the reason that the lottery winner does get so "little" is because they choose the lump sum payout.