This morning we learn that one of the two winning tickets in last night’s Megamillions drawing was purchased in Maryland. It wasn’t necessarily a Maryland resident, but it’s certainly likely to be a Maryland resident. I don’t want to pry, but there are a few questions I’d love to ask, if anyone can put me in touch with the lucky winner:
- You just won half of the third-largest jackpot in Megamillions history, a share worth about $200 million. You’d probably like to use a large part of it to help other people. Where do you think it will do the most good? Would it be better to donate it to private charities of your own choosing, where you can retain some control over how it is spent? Or would it be better to pay it in taxes to the state and federal governments and let them allocate it as carefully and wisely as they customarily do?
- If you take the annuity option, you’ll be earning between $3 million and $25 million per year for the next 30 years, not counting whatever you earn by reinvesting the money you’ve won, or by working if you happen to like your work. Would you rather be living, working, and investing in a state with a high income tax, or a state with no income tax at all? Would you rather spend your disposable income in a state with a high sales tax or a low sales tax? Do you want the state to take a large piece of your estate when you die, or do you think you should be able to give that piece to your family, friends, and favorite charities?
- Right now, you probably have way more money than you ever thought you would have, and it’ll be easy to focus on how happy you are to have what the government leaves you. The lottery folks may withhold the taxes you have to pay on the winnings themselves, which will ease the pain in the same paradoxical way that pulling a tooth out all at once eases pain. But you’ll probably need to make quarterly payments on your other earnings, the fruits of your labors and of the choices you make as the steward of all this money. You’ll make these payments for the rest of your life, and over time they will come not from a one-time windfall but from money you’ve earned through your own efforts. Please, for the benefit of posterity, keep a journal and write down what you honestly think about paying those taxes as the years go on. I’d love to know how you—even with more money than anyone needs—come to feel about that. Some people say taxes are “contributions,” almost as if they’re voluntary. Your tax bill now runs to the millions. What do you think?