I recently learned there is a big boxing match in Las Vegas tonight. I do not follow boxing closely, but I assume the Marquess of Queensberry rules are still being utilized. Earlier today, I was looking at a few Youtube boxing videos and was amazed at how much the sport has changed over the years. Or has it?
Here is a brief overview of boxing over the years.
Hear is an overview of the "event" today.
Joe Hand is 81 years old and runs a business that distributes fights to bars, Joe Hand Promotions. He said he’s never seen anything like this.
“This fight, we’ll show it ourselves in 6,000 locations," Hand said. "This is not a fight. It’s an event.”
Probably the biggest evolution of the sport has been the ability to monetize bouts very effectively.
In a few ways this fight has similarities to government lotteries. Obviously, if the underdog wins tonight, many betting fans will feel that they have won a mini lottery. And, just as taxpayers are uncertain as to what the governments do with the profits made from their lotteries, so, too, the IRS is uncertain where the taxes go from the millions these fighters are paid.
"taxpayers are uncertain as to what the governments do with the profits made from their lotteries"
I thought there is normally a full accounting of lottery financial operations. See page 2 of the California report.
"IRS is uncertain where the taxes go from the millions these fighters are paid"
I think the IRS has very effective ways of taxing these amounts even if not all competitors are US citizens or residents (for income tax purposes). Where there is a bigger challenge is in taxing the winnings from illegal betting. As Al Capone found out, even income from illegal activity is supposed to be reported.
In reading about the PowerBall lottery this week, I learned that consumers spend more on lottery tickets than all sports, media, and other organized entertainment events. It literally is the biggest game in town.
Really what the IRS, state and local tax officials should do is embrace the lottery concept. Offer a full double rebate of all taxes paid in the past 10 years plus interest for 1% of filers randomly selected who have filed by the due date and whose returns are deemed complete and accurate. That would probably boost revenue, reduce compliance costs, and make paying taxes fun (or as much fun as such things can be).
California lottery: I was reiterating the disappointment that some California educators have expressed over the years about how little of the lottery revenue actually "supports" education, which from the get go was touted as a program where it would be a big help in supporting the schools, but: "The average each year hovers between $40 to $45 billion, less than two percent of the state's public school funding." (From 2012 article) It's better than nothing, as they say.
Lottery officials say they are simply following the law.
"This was never meant to be the savior for all schools, but $1 billion plus a year does help schools in real ways," said Alex Traverso, a Lottery spokesman.
"In reading about the PowerBall lottery this week, I learned that consumers spend more on lottery tickets than all sports, media, and other organized entertainment events. It literally is the biggest game in town." And those events include Nascar Racing and Football. Wow.
"California educators have expressed over the years about how little of the lottery revenue actually "supports" education"
The math is actually quite astounding. Out of each dollar, $0.63 goes to prizes and roughly $0.25 goes to education and the remainder is overhead and marketing.
In other words only about 2/3 of "net" proceeds (sales minus prizes) goes to education which means the revenue raising component is 1/3 of effective revenue. That is incredibly inefficient.
What is more serious is that this method of raising revenue is terribly regressive in nature and just a dreadful way to provide educational funding.
However, it is popular with both voters and politicians who seem to have made a Faustian bargain that the end justifies the means, at least when it comes to something "good" like education.
I taught in CA public schools for 38 years, and I remember well that when state officials first proposed the lottery they promised that it was meant to supplement the school funding that already existed. Of course, only a few years later after the lottery was up and running, our state legislators decided that the schools didn't need as much guaranteed funding anymore due to all the money being raised by the lottery. The end result was a far less stable funding source, and ultimately our schools received much less funding overall than if the lottery had never existed.
That's a terrific idea! Where can I buy my ticket?
That is the beauty of the scheme--there is no need to buy a ticket since your tax return itself is the ticket.
It is indeed a wonderful idea and I am thinking of starting a company to provide the necessary back office services to governments at all levels both here and around the world.
If you would like to get in on the ground floor of this wonderful investment opportunity, let me know and I will try to persuade my partners to bring you on board. A certified check in an amount that confirms the sincerity of your commitment to the vision would certainly enhance the prospects of your acceptance into the group.
John Oliver's perspective on lottery's support of education: The Lottery: Last Week Tonight with John Oliver (HBO) - YouTube
Now that the big fight is over, the only question that remains, is whether it was a shameless "money grab" or a genuine wealth creation event.
Here are two starkly different perspectives--only one (at most) can be correct.
Depending on which version you find more palatable, you will either make the right or wrong call on whether the nation's trade agreements should be dramatically changed.
@oldbooks1---Is this an economic quiz? Anyways, the fellow in the one article was wrong about the fight being a waste of money because it would not be competitive in any sense of the word, for it was. He probably had good moral intentions, but was also probably wrong about the money being spent elsewhere to solve other problems. He may have had in mind the ten thousand destitute and homeless citizens who need help and who reside in the underbelly of Las Vegas not far from the glorious lights of the strip, a wonderful place that I had the "opportunity" to visit years ago. Some of the wealth created by the big fight will most likely flow their way in some fashion.
"In a market society, the wealth created in one sector expands outwards to benefit everyone. It means more jobs, more investment, more trading, and generally more opportunity for all."
The big fight certainly created a wealth of fun for a significant minority of humans, a form of wealth that seems to lessen in value as it transitions into mem
ories. So, yes, the big fight created much wealth for the minority of people across the globe who were involved. And the people who did not participate were probably enjoying themselves in other ways, no matter if they paid for that enjoyment or not, with, of course, the exception of people who were in pain during this time. Again, yes, people generally got what the traded for, but did this event bring forth the greatest happiness for the greatest number of people, that is to say, more so than if it had never occurred?
"Again, yes, people generally got what the traded for, but did this event bring forth the greatest happiness for the greatest number of people, that is to say, more so than if it had never occurred?"
Let me answer by way of analogy.
The other day I was in an ice cream store and pondered long and hard before choosing a flavor to try for the first time.
At the time I was certain it would promote the greatest happiness. Now, however, I am wondering whether the happiness might have been even greater if I had chosen a different flavor, had a cookie instead, or avoided either artery-clogging treat.
So on the bigger question you pose, in the immortal words of the White House Press Secretary, "I will get back to you on that."