Phoenix, AZ – Arizona Powerball lottery winner takes one-time payout to avoid the fiscal cliff. According to The Blaze, the second winner of the $587.5 million Powerball jackpot was identified Monday as Matthew Good. Amid a nationwide buying frenzy, lottery tickets were selling at nearly 130,000 a minute, but Good spent only $10 and kept the winner in the visor of his car overnight before realizing he was an instant millionaire.
As previously reported by The Inquisitr, Matthew Good had originally wanted to be left anonymous, but lottery winners in Arizona are a matter of public record. So it was not too long before the winner of the second-largest Powerball jackpot in US history was outed.
“It is difficult to express just how thankful we are for this wonderful gift,” Matthew Good said in a statement. “We are extremely grateful and feel fortunate to now have an increased ability to support our charities and causes. Obviously, this has been incredibly overwhelming and we have always cherished our privacy.”
What’s interesting is that the fiscal cliff played a major part in Good’s decision to take a one-time payout of $192 million. President Obama and the Democrats are heavily pushing for higher taxes for the rich. This would include the newly rich, especially Powerball winners. As the Federal debt crisis continues to worsen there is a huge likelihood that taxes must eventually be raised on everyone just to keep up with interest payments on existing debt.
Good had 180 days to claim his share of the Powerball jackpot. Large jackpot winners have the option of splitting up their prize into annual payments. Good questioned a team of financial advisers and decided that higher taxes were likely to come down the pipeline in 2013. Currently, lottery winnings in excess of $5,000 are subject to a 25 percent federal withholding tax.
That’s just the beginning: now you have to add federal income taxes and Arizona state lottery taxes. In Good’s case his gross prize is so large that even if he lived to a 100 (he’s 37 now) his annual payment would still exceed several million dollars. This would mean his federal income taxes would fall into the highest marginal tax rate bracket. At today’s rates that would cost him 35 percent, but if the Bush tax cuts expire that number jumps to 39.6 percent. Good does suffer from a reduced gross prize sum for taking a one-time payout but overall he’s saving money in the short term. With smart investments he may even become the next American billionaire.
What do you think about the fiscal cliff affecting even Powerball winners?