preview

Causal Relationship Between Gambling And Income

Better Essays

Abstract
Causal relationships, based off the median income level and overall gambling revenue, in several states will be analyzed by measuring both real and nominal income against commercial gambling revenues. In order to demonstrate such relationships, quantitative and qualitative variables ranging from, fiscal year 1999 to 2014, throughout the United States, will be supported by secondary data, such as the United States Census Bureau, and additional scholarly literature. In addition, we will also consider gambling motives that are triggered by the domino effect of income inequality. Ultimately, our research will reveal that there is not a significant relationship between gambling and income. Regression models will be used to support this …show more content…

Studies show that while some individuals gamble for leisure, there is a population of individuals that use this opportunity to compensate for income inequalities.
An example of income inequality comes in the form of special taxes that are attached to the dollar amount that one may win following his or her gamble. The inequality about this tax is that it deducts a percentage of the winnings, which reduces the individual nominal income. Fortunately, these taxes provide funds that allow communities to gain the opportunity to thrive.
According to the Georgia Lottery, “all Georgia Lottery prizes are subject to applicable federal and state withholdings, and state and federal income taxes. The GLC reports to the IRS and Georgia Department of Revenue name the winners of prizes above $600. Georgia state income tax of 6% and federal income tax of 25% are withheld from prizes of more than $5,000 at the time the prize is claimed” (Ga Lottery).
Regardless, these taxes reduce the amount of money an individual will anticipate. These individuals usually bring in a low monthly income and are subject to government assistance programs. The latter is not always the case. As a whole, both low income and high income people contribute to gambling activities. Not only that, taxes effect both parties nominal income. However, the “high income individual seems to recover quicker”, according to Stewart (Connie Stewart).
While many

Get Access