Do you own premium bonds?
Have you ever won money on premium bonds?I quite like the idea of them.

They are, I think, better than the national lottery - at least you get to keep your initial outlay. The National Lottery is just another poor mans tax.

The thing is, Premium Bonds are not that great as an investment unless you're a Higher Rate taxpayer who has used up their ISA allowance.

See what http://www.moneysavingexpert.com/ has to say on the subject (and whilst you're at it, sign up to his very useful weekly newsletter!)

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First of all, Premium Bonds are awesome, and yes, I have won several times with my meagre investment of 250.

second of all, 'poor man's tax' is, for want of better word, a stupid thing to call the National Lottery. It is not mandatory nor is it paid to the government - therefore it can't really be described as a tax by any sensible definition of the term - it costs only £1 a ticket, so even if it were mandatory it's not depriving anyone of their livelihood, and besides the prizes the money goes to charities etc.

Even 'voluntary charitable donation' is a more accurate term for buying a lottery ticket than 'poor man's tax'! Get a grip on reality!

For the record, I've never bought a lottery ticket and am in no way affiliated with Camelot or the National Lottery

Graham, if you highlight your link and use the URL button above it will work.

Kozmo, you sound a little aggressive today?!

I don't think calling the National Lottery a 'poor man's tax' is "stupid".

The odds for winning the National lottery are "stupid". There are many people in this country who spend a large proportion of their 'disposable income' on lottery tickets - - buying huge quantities of tickets, week after week. This income has already been taxed (in most cases).

They spend much more than they can afford on buying huge quantities of lottery tickets - and chances are they will never ever win. This really hurts the poor - who can't afford it.


I'm not saying that the National Lottery should be banned. It's up to you to buy a ticket if you want to. But it is essentially another poor man's tax. How much money does the government make from the national lottery?

Back to Premium bonds - I like the idea of them!

So, the government gets 12p from the £1. - from income that has already been taxed.

Therefore it's a 'tax'? There are a lot of people in this country who spend a large proportion of their disposable income on KFC. Is KFC therefore a poor man's tax? The National Lottery is run for profit by a company. As I said above - the national lottery is not mandatory - the government do not require you to buy a lottery ticket.

The government don't make money from the national lottery... They take 12% as a tax (less than VAT). Are you suggesting that it is this 12p that is unfair and a poor man's tax? If so, it's a lot worse on cigarettes and petrol.

[EDIT: you already said all of that bit...]

I genuinely can't see how you can seriously describe an optional game that people choose to play a 'tax' of any kind.

I think it is another 'poor man's tax' because it mainly affects the poor - who are spending way more than they can afford. The government then makes another 12p from their already taxed income. It just shafts the poor even more than they are already being shafted by Gordon Brown.

if the only reason a person is poor is because they buy too many lottery tickets then it is their own fault and deserve none of my sympathy.

Get a grip - the lottery is a game and people play by choice

Canvas, you really must stop taking dumbed-down newspapers seriously
(others would do well to heed that advice).

Stu is right!

I disagree. I think the National Lottery is a mugs game. I think that the people who spend the most money on buying huge quantities of lottery tickets, week after week, are usually the ones who can least afford it.

Also, I think the government should donate their 'tax duty' from the lottery to the NHS.

lol canvas, no one's arguing that the National Lottery is not a mugs game. I'm saying it's not a 'tax' though, unless the term 'tax' has taken on a new meaning of 'voluntarily purchasing a ticket to enter a game'

I expect some of the money from their duty (which is just an equivalent of VAT, after all) DOES wind up in the NHS - it probably gets allocated in the budget, just like all the rest of their money.

'poor man's tax' suggests that poor people are being forced/coerced to pay some form of levy from which only the rich may benefit. That's certainly not true of the lottery

It is essentially another 'tax' on the poor. Why do the government need to take 12%? Maybe to plump up their already tasty pensions?

Think of it as a 'Tory Robin Hood' - it steals from the poor in order to give to the bureaucrats, politicians and the rich. It takes a higher percentage of a poor man’s wages than a rich man's - the lottery is also played more often by poor people and is therefore a highly regressive tax.

OK? LoL

You're just carrying on to get a rise out of me. I know you don't actually think what you are saying is correct, because I know you're not actually insane. You're only carrying on to irritate me, aren't you...

Tax:
Theft:
Lottery:
(emphasis mine)

Notice the difference - taxation is a compulsory charge. Lotteries are a voluntary purchase. Markedly different from a tax.

Besides, even if the National Lottery could (by some new definition of the term) be classed as a tax, it's not a regressive tax at all - it's a percentage paid on a purchase, which makes it a progressive tax. Rich people can buy MORE lottery tickets, which would mean they pay MORE. Poor people can buy FEWER lottery tickets, therefore they pay LESS. Consider two people who each spend 5% of their net income on lottery tickets: which one pays more 'tax' - the one with the low income or the one with the high income?

In other words, you're incorrect about the lottery being a tax in the first place, and following that you're incorrect about whether such a tax would be progressive or regressive, if it existed.

They could - but they don't.



They could - but they don't.



It was Adam Smith who called lotteries 'a tax on ignorance'.

Ahh I see, the national lottery is a regressive tax because poor people CHOOSE to play it and poor people get enjoyment out of it?

Nope, you're still wrong.

You seem to misunderstand the very concept.

Aahh, so poor people are ignorant?

I think Adam Smith was referring to economic ignorance.

The lottery is fun, you give them money, and you get a little piece of paper with cute looking numbers on it. You then watch an awful television program all about picking numbers.

If the numbers picked happen to match the ones you picked, then you can become stupidly rich over night. Oh and most
likely you won't win, forgot to mention that in the nice description.

I think comparing Premium Bonds to the National Lottery is like comparing a Savings Account to a Casino. Then coming to the conclusion that a Casino is just another way to tax people.

Premium Bonds can be very good investments, the National Lottery is a far better investment if you are a lucky sod.

Comparison

The positive of a Premium Bond (as previously mentioned) is that, there is basically no risk, and that you can get some nice rewards. Negatives are you may not gain much.

The positive of the Lottery ticket is, it is much more enjoyable (for those who enjoy that kind of thing), it can be extremely rewarding, great for community groups etc. Negatives, you lose your initial investment, £1 a week, adds up. It makes some super rich, rather than many a little more wealthy. You have a very very little chance of winning.

I partake in neither activity, although I would pick Premium Bonds over the Lottery any day.

Simon.

Well yes, I suppose the lottery isn't an actual TAX on the poor per se. Nor is it a leech that identifies and picks victims by their income, and sucks them dry.

BUT if you have a low income you are twice as likely to develop a mental illness, three times more likely to commit suicide, three times more likely to be obese, four times more likely to die of smoking-related illness, and considerably more likely to play the lottery...

These things don't actively choose victims - the victims choose them ("choice" not really being the correct word).

I guess what I'm trying to say, and failing miserably (need sleep!), is that "poor tax" isn't such a bad concept to describe the lottery. It can be equated with many of the things above. These things aren't compulsory either, yet they have a disproportionately large (almost 'compulsory') effect as a consequence of lifestyles among other things.

Bah I'm failing to form coherent sentences. Perhaps someone else can get the words out for me?

Night!

Premium bonds will always get my vote over the National Lottery.

Winning rate at 3.8% tax free now so £16,000 should win you £50 every month.

As we are working on a lottery basis though, you may never win. That is why some people love gambling and not losing the stake and others hate it.

I am unable to find any sympathy for people who cannot afford to spend a couple of quid on the Lottery each week yet still do so!

There's no way it's in any way like a 'tax'. If we were all forced to pay an extra pound a week as a tax but that tax had the possibility of automatically depositing millions of pounds in our bank account, that would be a tax as well as a lottery.

As it stands you have to choose to play it. It doesn't bear any comparison whatsover to Premium Bonds because there's no saving of money that you can later withdraw. Not to mention putting away £100 a month into Premium Bonds is an ok investment, not the best for many people but it's by no means the worst either.

Technically correct, but they're dangling a pretty big carrot, coupled with tens of thousands of pounds spent on advertising as way of seducing the poor into parting with they're money without making them aware of ALL the facts, in particularly the odds. The facts show us that even though it is not "technically" a tax on the poor it does effectively operate as such.


You fail to recognise that given the correct conditions eg. extreme poverty coupled with huge incentives + zero information about the odds etc. - effectivily skewing the facts - that it is inevitable that the poorest in our society will be seduced into parting with what little money they have.


The facts/stats prove this to be completely innaccurate.


You display a complete lack of understanding for the facts. I certainly don't believe the poor are are looking for sympathy - off you or anyone else - just an equal opportunity to a decent quality of life - education, housing, job opportunities etc.


Would people play the lottery if they knew ALL the facts - eg the odds - as opposed to the ones we are bombarded with day in day out?


Seduced would be a more accurate term.


Then you have no understanding for what it is like to live in extreme poverty.

I can see the attraction of both. I'd love to win the lottery just to be in a position to help people. That might sound self-aggrandizing but it would be great to help people, anonymously of course. I really can't understand people who win the lottery and then just waste it all on themselves. What a golden opportunity they have to help people and make a difference in the world.

Neither. I had premium bonds before I new better, and before was old enough to invest in the stock market.

I three years I never once won a prize with £2000 in premium bonds. Meanwhile, investing that money in a smallish manufacturing firm somewhere near the bottom of the FTSE 350 has yielded 75% in the last year!

I have been following this thread with interest. It started off with a comparsion between premium bonds and playing the lottery presumably as a way of saving/making money. There is no comparison if you want a return on your investment choose premium bonds.

It is surprising how passionate this debate has become. However the trouble with the internet is that what you are reading is just someone's opinion, usually based on emotion and not fact.

Firstly, lets examine extreme poverty. Is anyone living in the UK today living in extreme poverty? They may be classed as poor because they earn considerably less than the majority, but extreme poverty? I doubt it.

Secondly, where are the figures that show a large proportion of these people that are living in 'extreme poverty' spend a large proportion of their disposable income on lottery tickets? (Which would actually be impossible because if they lived in extreme poverty they wouldn't have a disposable income).

Thirdly, when did being poor equal being stupid? I'm not sure that anyone in this country didn't know the odds of winning the jackpot. After all it is printed on the back of the ticket and listed on the website. They may not know the actual figure but I'm sure they know their chances of winning are slim to none.

And if we therefore surmise that the majority of people in this country have a disposable income, know the odds and still choose to voluntarily play the lottery then it becomes a simple matter of choice.

It should, if anything be known as 'the stupid man's tax' because most people will never win it. But is it anymore stupid than spending your money on cigarettes or alcohol, it certainly isn't as bad for your health.

You personally may never see any return on your investment but the moeny raised from the sale of lottery tickets will benefit many people not just the government.

You do what you want with your own money and let me do what I want with mine.

Lee Cameron is the author and webmaster at the popular Lotto4Pros.com blog

I would agree with Lotto4Pros above.

If you areto clasify the lottery as a poor mans tax then surely all sports betting etc should also be classified in this way, i don't have any figures to back this up but just for seeing the clientele in the bookies it would seem that there is a vast majority that are poorer people.

Hence, maybe its just that gambling is a way for poorer people to bide their time, ie. a sociable gathering whether you can afford to do it or not just in the hope of possibly winning something whilst trying to enjoy yourself at the same time

The research has been done - it's a fact. I'm too busy to find the links for you right now - but you can do your own research - it's out there for all to see. By the way, it's about relative poverty - not absolute poverty.

lottery taxed or not taxed,, and whatever charity gets money from it, makes no difference to anybody who want's to play it.. You win or lose, it's gambling... Then so is premium bonds, people buy them in the hope of winning a prize,, although you get your money back.... it's gambling.. The difference is I suppose, is more exciting even winning the min... £10. prize on a £1 outlay feels good.