National Lottery: tax and theft

Play the National Lottery onlineThe last Tory PM, John Major, has been reduced to naming the National Lottery as his crowning achievement and has used its tenth anniversary celebrations to allege the government’s stolen lottery cash. The whole thing’s an excellent example of muddled politics.

Major makes a good point when he says the lottery was established to help good causes from the arts, sports and heritage, that is, worthy stuff that can’t compete with things like health and education. The latter are so important they need a sustainable and equitable funding source and that means taxation, he argues. He clearly doesn’t want the lottery to be seen as another form of tax, yet for many that’s what it is.

It’s actually quite hard to get a handle on who is actually playing. Many claim it’s only poor people, too ill-educated to realise that odds of 14 million to one aren’t worth pursuing. The National Lottery Commission has produced a little social research, that conspicuously fails to answer that key question. Mostly they worry about children. Their report on participation and expenditure fails to profile lottery players. It tells us, for example, that ABs who play, spend as much as C2s who play, but doesn’t tell us whether the player profile matches that of the UK or is skewed one way or the other. Even without such skewing, the C2s are handing over a higher proportion of their hard-earned cash. This is a very obvious omission, so let’s assume the critics are right and it’s predominantly a poor person’s pastime.

It’s a clever theft, if theft it is, because it’s done in part by asking the lottery players what they think a good cause is. Government likes to pretend it’s all about good causes and that participation, which has been slipping, will improve if the causes are right. That’s why we should let the players define a ‘good cause’. In truth, if you want your money to go to a good cause, you come up with own definition and hand over the cash directly. Nevertheless, Tessa Jowell, the Culture Secretary, can say ‘Giving the public a voice in awarding lottery grants isn’t grand larceny, it is democracy. So is buying cancer scanners…’ and keep a straight face.

She should be laughing because she knows that if you’re too ill-educated to understand the odds, you won’t realise that cancer scanners would otherwise come from taxation. And that your weekly flutter is actually relieving the tax burden that falls more squarely (and equitably) on those wealthier than you.

Muddle will continue, as to tell the lottery players that government is taking advantage of their poor education, is to risk the wrath of those who don’t like being called stupid. No doubt they’ll continue to call for lottery proceeds to relieve the tax payer who will eventually be called upon to go back to making grants to arts, sport and heritage.
Update: National Lottery Consultation… spending the tax on the gullible

2 thoughts on “National Lottery: tax and theft

  1. “She should be laughing because she knows that if you?re too ill-educated to understand the odds, you won?t realise that cancer scanners would otherwise come from taxation. And that your weekly flutter is actually relieving the tax burden that falls more squarely (and equitably) on those wealthier than you.”

    I am amused that you refer to the tax burden being more equitable if it falls on the wealthier. Why? When a group of people decide to share expenses, it is usually considered fair when everyone contributes equally (i.e. a flat absolute tax contribution). It’s harder to see why it’s fair that people should contribute in proportion to their income (maybe they work harder, for example, or value money more than leisure), but perhaps a proportional taxation is fairer than equal contributions, in some ways. Our current system using escalating rates is bizarrely UN-fair.

    People should be treated equally, rich or poor.

  2. Yours is the argument that rightly cost Thatcher her premiership having brought violence to the streets in the form of anti-poll tax riots. People got so het up precisely because flat taxes are so inequitable. A fair tax system takes account of ability to pay and I have no problem paying a higher rate of tax because I can obviously afford it.

    Earnings bear very little relation to how hard working one is or how much we value our leisure. I doubt that I work anywhere near as hard as a nurse, say, or someone on minimum wage, yet still I earn more.

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