Forbes - Someone in Illinois bought the winning ticket, and if he or she does like most winners, they will take the lump sum, not the annuity. The $1.28 billion prize, which is the second-largest jackpot in Mega Millions lottery history, can be claimed in a lump sum or over time. The 1.28 billion is only if you take it over time, but if you want it all now, you get $747.2 million.
Yet like most things, even that lower cash figure gets whittled down by the IRS. In fact, lottery winnings are taxed, with the IRS taking up to 37%. Curiously, though, only 24% is withheld and sent directly to the government. The winning cash prize of $747,200,000 after the 24% IRS withholding tax, drops to $567,872,000. But the winner shouldn’t spend all that. After all, the federal income tax rate goes up to 37%, and you can assume that the winner is in the top 37% bracket. Well, many hundreds of millions of dollars into the top tax bracket, as it turns out.
The spread between the 24% withholding tax rate and the 37% tax rate on these numbers is another whopping $97,136,000 in tax. That’s a big check to write on April 15th. Since the tax withholding rate on lottery winnings is only 24%, some lottery winners do not plan ahead, and can have trouble paying their taxes when they file their tax returns the year after they win.
The ticket was purchased in Illinois, and Illinois has a 4.95% state income tax, so that lops off another about $37 million in tax. In rough numbers, assuming the winner is an Illinois resident, that should mean the winner takes home about $433.7 million. That’s huge, but it’s a far cry from being a billionaire.
We have a pretty good relationship at this point, and we're all in the circle of trust now, so I'll be painfully honest with you guys.
I was pretty beat up last weekend about not winning this jackpot.
When it came out that the winning ticket had been sold in Illinois, not far from downtown Chicago,my heart started racing and I pulled up tickets on my phone again to make sure I didn't have the numbers.
I'd spent the whole week visualizing a big win and everything I'd do with the money.
First, I'd buy my way into Illinois state government like JB Pritzker did and clean fucking house. JB, Lori, Kim and everybody else tanking this place would be gonezo.
Next, I'd stop having to beg people to invest in my businesses and just fund them myself.
I've mentioned it before but I don't know anybody worse at raising money than me. I am fucking awful at it. I'm pretty good at knowing what works, how to make it work, and working my butt off. Have an incredible team of partners and employees all around. And we've never have a dud or place not make money. I watch my business partners have people they know throwing money at them. I know tons of rich and successful people and can't get half of them to invest a dime. (Dave has said several times he'd love to invest in different projects but he has conflicts of interest and can't) Even worse, I have to sit and watch terrible operators, businessmen, and con artists have people lining up to give them money. Like Bernie Madoff shit. (Can you tell this irks me?) So yah. I'd say fuck everybody, I don't need anybody's money anymore and I would just self-fund everything. Rant over.
Next, I'd buy some moderate to very nice houses in the Caribbean (St. John), Italy (Florence probably), and the mountains of Wyoming or Colorado. Nothing too lavish or extreme, just nice places in my favorite places to visit.
Then I'd clean up a lot of the issues in Chicago by giving a couple hundred million to Chicago public schools, earmarked for the neighborhoods and communities that need it most. Setting up after-school programs, getting the kids the attention and materials (computers, ebooks, etc), and helping boost the coffers of organizations that make a real difference like Big Brothers and Big Sisters.
I had it all figured out.
Then I didn’t win, and my dreams were dashed.
But now? Now, reading just how much of that 1.28 BILLION dollars the fucking scum-sucking government takes out of it, now I’m happy I didn’t win.
We all should be.
Granted, $420 million is an awful nice payday. That sets you and your family tree up for life. Your grandkids will be going to Ivy League schools, rubbing elbows with the upper crust of society, blowing your fortune on coke habits and sports cars.
But imagine having to live, knowing in your mind, that the “jackpot” was 1.28 billion dollars, and the government took two fucking thirds of it to do what the government does best- waste it.
A $400 million payday is like a normal Powerball win. You're in the same boat as the people who go from trailer park to lottery winner who blows everything and back to the trailer park at that amount.
And the IRS, Federal Government, and Illinois Department of Treasury- have you no shame?
Where do you get off thinking its fair and just to take a rip like that off a lottery win? You're already making a killing on all us suckers who play and never win (aka the poor peoples tax), and on top of that you're gonna hammer the lucky son of a bitch that does win too?
So again, we should all be glad we didn't win.
Fuck this jackpot, and good luck to the sir or mam from Des Plaines who won. I hope you can still sleep at night.