## Monday, March 19, 2012

### The \$1mil lottery winner being bashed for continuing to receive food stamps.

I recently saw the article about the women(Amanda Clayton) who won the million dollar state lottery, and kept getting food stamps.  Although I don't completely agree with it, I decided to crunch some numbers and see if this really hurts or if it still helps the economy.    She won \$1,000,000 after taking the lump sum she got \$700,000. Then the key portion here is she was "taxed" \$200,000"  Leaving her winnings at \$500,000   Now according to what  have read so far is she was receiving \$200 a month in food stamps.

The key argument that everyone has is that Amanda Clayton  is "cheating" the system by using "other" peoples tax dollars to get food. Lets break that statement down a little bit. Whose tax dollars is she spending?

Lets take the \$200,000 "she" paid in taxes from the lottery.  If she is receiving \$200 a month in food stamps lets figure out how much of the \$200,000 in taxes "paid by her" from her winnings covers with her food stamps. so we will divide the \$200,000 by \$200 dollars per month we get 1000 months out of the \$200,000 "she paid in taxes" from her winnings. 1000 months divided by 12 months a year  gives us 83.3 years worth of \$200 dollars a month in food stamps.  From this basic math you can see that she is actually going to be living off of her own tax dollars for 83.3 years.  I am not sure if there is a cut off on how long you can keep receiving benefits. So lets assume you can keep it for 18 years(because most people get it for their child)  83 years minus 18 years = 65.33 years so after she is past the limit on drawing food stamps there is 65.33 years left over of \$200 a month for others . so lets divide that by the number we decided on of 18 years to see how many people can receive benefits off the remainder 65.33/ 18 = 3.629

Lets look at from the perspective of the amount of money left over instead of the time.  18 years at \$200 a month is \$43,200 which is how much she will use in 18 years of being on \$200 dollars a month food stamps. Leaving \$156,800 for the food stamp program.

Lets divide that up to see what else can be done with it.( now keep in mind we are still working with the money that Amanda Clayton paid for the taxes on her winnings.) We will take the \$156,800 left after Amanda receives 18 years of food stamps out of the taxes she paid on her winnings.
At \$200 a month 1 person receives \$2,400 a year in food stamps at 18 years that one person can receive \$43,200 over the 18 year period in food stamps  now lets divide that number out of  the \$156,800 left from the money paid in taxes by Amanda from her winnings. to see how many people can receive 18 years of benefits \$156,800/ \$43,200= 3.629  so basically 3 people in addition to Amanda can receive  \$200 a month in food stamps for 18 years off just the money that Amanda paid in taxes from her winnings.

Now lets Recap Amanda Clayton paid \$200,000 in taxes from her lottery winnings. After she Receives 18 years worth of food stamps at \$200 a month there is  \$156,800 left. Enough for 3 more people to receive 18 years of food stamps at \$200 a month.  and a surplus left in taxes of \$27,200 which is still enough for 11 additional people to receive 1 year of food stamps.
So the question I leave you with is, "whose" tax dollars are being used by Amanda Clayton? , and Is Amanda Clayton hurting or helping the economy?
From the results above, She is only receiving her own tax dollars, and she is helping the economy by supporting additional people in the tax program from her taxes paid from her winnings.