Many states have begun raising revenue by operating lotteries rather than through direct taxes. According to an

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Many states have begun raising revenue by operating lotteries rather than through direct taxes. According to an article on bloomberg.com, “The lowest-income households in the U.S. on average spend $412 annually on lottery tickets, which is nearly four times the $105 a year spent by the highest-earning households.” 

a. In what sense is a state-run lottery like a tax? 

b. If a lottery can be thought of as a tax, is it regressive or progressive? Briefly explain.

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Economics

ISBN: 9780135957554

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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