Less than a quarter of respondents chose a tax rate of 30% or higher on any level of lottery winnings. The vast majority thought that a reasonable amount to pay was much lower, with the average being only 15%. Democrats and Republicans differed only a little: The average rate preferred by Republicans was 14%, compared with 17% for Democrats.
There was no evidence that respondents thought rates should be any higher on a $100 million prize than on a $1 million prize. Differences across prize amounts were mainly too small to be regarded as statistically significant. For all of our hypothetical lottery prizes, over half the respondents chose a tax that amounted to 10% or less of the lottery winnings.
These results may seem to contradict popular support, especially among Democrats, for raising taxes on the rich. In the same poll, we also asked about raising taxes on high earners. Sixty-one percent of respondents favored raising taxes on families that earn more than $250,000 per year and also 62% supported the “Buffett rule” proposed by President Obama (a minimum tax rate of 30% on millionaires).
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