Another Lottery Idea Worth Considering?

We recently released a twopart 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?


How about a tax-holiday lottery - the winner never pays taxes again. Buy-in could be based on a percentage of your tax bill.

Eric M. Jones

...and the winner will get $1 per year for a million years....

Jim F

@ #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

Ian Kemmish

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:


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?

Simon Cox

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.

Ed from Chicago

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.


In São Paulo, since 2008 there's a monthly lottery for those who ask for a receipt when making purchases. The lottery is part of a system called Nota Fiscal Paulista which is intended to deter tax evasion by encouraging customers to ask for receipts (if receipts are not given, retailers may hide sales from the state government and avoid taxes). You get one ticket for every R$ 100.00 in purchases. There are over 8 million people registered already. The awards for this month's draw total over R$ 18 million, the first prize being R$ 1 million.


One more step in the unrelenting effort to reduce all of life to random chance. Everything is a gamble, nothing comes from effort and informed choice. Ultimately dehumanizing.

So then, why stop at taxation? Let's go all the way and make education dependent on winning tickets, and retirement, and health care, and whether you eat tonight.....

Ben Kriechel

This saving with chances to win a (bigger) prize has a long tradition in German savings banks, it is called "Gewinnsparen", 4 EUR are saved 1 EUR contributes to a lottery with monthly drawings. The idea is indeed to make saving more exciting.


If I were to ask you, and this is off topic from your post, but what advice would you give to a classroom filled with journalism students?

I am writing a paper about you right now and thought I would take a far fetch and see if I couldn't get a little something from the horses mouth himself. :) You have my e-mail address. It would be exceptionally wonderful to hear from you.

Thank you

Eli D.

Heck, I postulate that this new scheme could be a modern way of extorting more money from us. Think about it: $5/Person multiplied by 20 million people (using NY as an example) is a whopping $99 million profit!

Just one problem; Who gets the money from this lottery? Should it be designated to state governments or to federal governments? Maybe we should take into account the perecentage of taxes that are directly related to states (property tax, sales) as opposed to federal taxes (income tax, social security).

Additionally, this lottery drawing seems to be progressively taxed? Should someone reporting $10 million of income a year have the same rate of money invest imbibed as one who reported just $1,000?

On a positive side, maybe this will solve our age-old problem of those who don't report their income?????


One winner per state? Good luck getting California to approve that.

Ashley House

For an 'interest'-ing (!) comparison of the UK 'Premium Bond' discussed in pt.1 to bank saving rates, see:


In São Paulo (Brazil) we have something called Nota Fiscal Paulista and you receive a coupon for every R$ 100 spent.
With these coupons you can win like R$ 200000 every month.

And yes, it?s a Goverment Program: