Lottery proposals wind up ‘screwing the poor’

“There’s a correlation between those who play the lottery and income,” Nevada economist Thomas Cargill said in 2005. “You know, the lottery is a regressive tax on people who are not very good at math. I saw that on a bumper sticker in California.”

Cargill is a pretty conservative guy, but he still worries about using government fiscal policies to soak the working poor. When I asked him if it wasn’t up to low-income workers to look out for themselves, he said, “That’s correct. But the question is, do you want to finance government expenditures, which are supposed to be for the public good, with a regressive tax?”

That’s supposed to be a traditional concern of Democrats, yet it is often Democrats who keep hauling out lottery proposals to fund government. In 2005, Assembly Speaker Richard Perkins and Senate minority floor leader Dina Titus — both Democrats — were supporting the notion.

This year, it’s Rep. Harvey Munford, a Clark County Democrat who, as usual, is doing it for the best of reasons: “This is a loss of revenue for our state that could be helping the education of our younger constituents. It would do so without increasing taxes.”

It’s always proposed for the best of reasons, but just as putting “no fat” on a bag of calorie-rich, high-salt potato chips doesn’t reduce its threat to health, labeling a lottery as an aid to education doesn’t conceal the fact that it is a government-approved means of screwing the poor.

The final report of the National Gambling Impact Study Commission, which for three years scrutinized gambling in the United States, found that “players with household incomes under $10,000 spent almost three times as much money on lotteries as those with incomes over $50,000.”

Duke University economist Philip Cook: “It’s astonishingly regressive. The tax that is built into lottery is the most regressive tax we know.”

In 2003, Rep. Kathy McClain, another Democrat, proposed a lottery and said, “Regressiveness is not a good argument in Nevada. People can play keno and penny slots here with the last pennies they have.” She wasn’t wrong, though arguing that because people already act foolishly is not a great argument for giving them more opportunities for foolishness.

She was correct that regressiveness is not often on the radar screen in Carson City. This year, the governor and legislators have cited the need for fairer taxation in Nevada, but as the weeks have passed little research on the issue has been done and fewer references to tax equity have appeared in the legislative debates. As often as not, fairness is mentioned only as a selling point.

The Nevada casino lobby this month argued, “Now is not the time to be focusing on a regressive tax which doesn’t provide an immediate revenue solution, does not create quality jobs, and has not proven to solve revenue problems in other states.” The tears the casinos cry for the working poor are pure crocodile — they’ve enjoyed the way regressive sales taxes on goods have kept casino taxes low for decades.

In 1864, lotteries were so disreputable that Nevada’s founders wrote a ban on them into the Nevada Constitution. A lottery in Nevada would require a state constitutional amendment. The Munford proposal would have to pass two sessions of the Legislature and then be approved by voters in order to amend the constitution. Constitutional change is supposed to be difficult, and this is an instance when the reasoning is demonstrable.

It’s interesting how the Democrats keep promoting lotteries while conservatives, on behalf of traditional Democratic constituencies, keep making the case against them.

Dennis Myers is a veteran Nevada journalist.