Another Lottery Idea Worth Considering?
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?