Opinion: Why not 1,000 lottery winners?
What would you rather see: one person becoming another super-billionaire or 1,000 people receiving enough money to change their lives dramatically? Before you choose, think about it for a couple of minutes while reading the following comments.
Our current billionaires have so much money that they have run out of ways to spend it. Of course, they could pay their fair share of taxes and lessen the burden on all the rest of us. But, ask any of them. Larry Ellison? Jeff Bezos? Elon Musk?
They’d probably tell you that wouldn’t be much fun. It’s a lot more enjoyable to own your own island. Larry Ellison, co-founder of Oracle, purchased his own Hawaiian island. He owns 98 percent of Lanai, the fifth largest of the Hawaiian Islands. Lanai is 141 square miles, and the State of Hawaii owns the other two percent of it. By the way, the island cost Ellison less than one percent of his fortune. That would be like a person with the average American annual income buying a small chain saw to trim the tree in the backyard.
Jeff Bezos has a fortune that recently surpassed $200 billion. That’s 200 thousand million. He spent a tiny pinch of that, $500 million, on a 417-foot-long multi-story super yacht. Of course, it comes with its own “support yacht” to run back and forth to the pier, a helipad, and more extravagant appointments than most of us can even imagine.
He also has a $43-million-dollar, 500-foot-tall mechanical clock that ticks only once a year. He calls it a “10,000 year” clock that symbolizes “long-term thinking.” Then, he used some pocket change — about $80 million — to purchase three apartments, each of which has a lovely view of Madison Park Square along Fifth Avenue in New York. It is the most expensive apartment deal ever in the Big Apple. Why does he need the three apartments along with all of the other properties that he owns? Don’t know. Maybe they were all available at the same time and he couldn’t make up his mind about which he liked best. But he still wasn’t satisified, so he bought a fourth apartment. He then joined the four apartments together to form one 23,000 square-foot apartment from the 20th floor to the 23rd floor at 212 Fifth Avenue. Oh, and there’s a 5,000 square foot rooftop terrace with a complete bar and swimming pool.
Because the apartment can accommodate so many of Jeff’s closest friends, he needs to feed them. So, he bought the entire Whole Foods chain, but — heck — that was less than $14 million. His really big expense was funding his very own rocket ship. He’s committed $1 billion per year to his Blue Origin company. And, he dug $250 million out from where it fell between the cushions in one of his couches to buy The Washington Post, to publicize his journey into space. That pretty well covers the interest on this year’s dividends from his investments.
Elon Musk, who vies with Bezos on being the world’s richest man (possibly not counting Vladimir Putin) is the square peg that doesn’t fit into the round hole. He uses his money mainly to make more money. Mostly, he works. According to Bloomberg Insider, he often doesn’t leave the Tesla factory for three or four days at a time. When he has custody of his kids from a former marriage for a week, he takes them camping (for about half the week).
In California, he owns hundreds of millions of dollars in residential property, but he’s vowed to sell it all and “own no house.” Although he owns fabulous automobiles and other items that amuse billionaires, most of his money is invested in his corporations: Tesla, Space X, Boring, Solar City, etc. Recently, he shelled out $44 billion for Twitter. Why? Maybe just because he could.
Naturally, being a genius, he only put up part of the cost, $31 billion. He borrowed the other $13 billion from a bank. Then he fired all of the top management and 4,000 employees. Twitter employees used to get free food at work. Now, the remaining staff must pay for it, and the bank can’t unload Musk’s loan, even at 60 cents on the dollar. That’s how billionaires are made.
At this writing, Powerball lottery is worth about $2 billion. If you take the lump-sum payout, about 25 percent will go to federal tax. In California, of course, the state will take its cut. And the “lump-sum” penalty leaves a bit less than $1 billion (that’s 1 thousand million). Nice. But, like other billionaires, it’s more money than you can spend. So, here’s my suggestion.
As the lottery money pours in, let’s offer multiple $2-million-dollar prizes. Because 2 billion is 2,000 million, the current lottery could offer 1,000 two-million-dollar prizes. Each winner would get a lump-sum payout of about $1,225,000. That’s a life-changing amount for the vast majority of people, even in wealthy California. And the odds of winning are considerably better than the current 1 in 292,201,338.
Think of it this way. The $1,225,000 is a house (free and clear, so no monthly payments), a couple of nice cars (free and clear, no monthly payments), college educations for both kids, a summer rental in the south of France, and a healthy chunk of change to invest. On the invested money, the dividends would compound year after year, increasing your wealth.
As I’ve said before, I voted against the lottery bill and I’ve never purchased a lottery ticket. So, perhaps I’m a lone voice in the wilderness. But so long as we have the lottery, why not use it to improve the lives of thousands of people each time the numbers are drawn instead of creating another billionaire whose initial acts will be to buy a Dodge truck and get a tax attorney to make sure that not much of the money, if any, goes to the government each year as taxes.
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Jim Glynn is Professor Emeritus of Sociology. He may be contacted at email@example.com.