States turning to professional marketers to take more money from its citizens

An article by Michael Gromley of the Associated Press points to a proposal from NY Gov. Eliot Spitzer to use future lottery profits from the state lottery for higher education.  The idea is simple: hire a group of professional marketers to lease the lottery from the state and turn out huge profits so everyone can benefit economically, well, everyone but the people.

The article explains that the days of claiming gambling addictions are unique to the poor would be over if such a plan is executed.  Wall Street believes that in order for a private company to think outside of the box and take more of the people’s money, they would have to target the middle class by placing games in suburban chain stores like “Target, or within impulse reach of banks’ ATMs.

The problem is that this type of proposal sets up a tax increase on the public where private companies will reap the benefit.  As the article explains:

“It’s a setup,” said Assemblyman Richard Brodsky, a Westchester Democrat. “What you are seeing is a pattern where, after promising no new taxes, they are out there proposing huge increases in what the middle class and working class pay to the government. And the upper class escapes.”

In the lottery proposal, Brodsky said Wall Street will reap millions in investor fees, benefit from a better higher education system, and avoid income and business tax increases. “We are taxing the users, not the beneficiaries.”

Other states are also considering privatizing their lotteries and everyone needs to understand that its ramifications are serious.  We are now dealing with some states that not only want to use gambling to tax its people, but now they now want to use trained professionals to take as much from its people as possible.  Sadly the politicians that support this form of revenue gathering will be making a bad investment for its people as each $1 they collect from gambling revenues, the state will lose $3 in social cost.


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