Should the Federal Government Tax Lottery Winnings in Canada?

As it stands today, the federal government in Canada does not tax lottery winnings. But the government is constantly looking for new revenue and new taxes are always a possibility. Should they consider a lottery tax?

Many countries around the world tax lottery wins, including the United States, Canada's closest neighbor. In the U.S., not only does the federal government tax lottery winnings, but so do many of the State governments. In fact, just recently, New Hampshire introduced a new 90% tax; that's in addition to the $30% levied by the federal government.

The case could be made that the Canadian government should not tax lottery winnings because lottery profits already benefit the community. That would be like double-taxation. For example, lottery proceeds from OLG (Ontario Lottery and Gaming Corporation), directly goes to help things like non-profit companies, charities, provincial hospitals, sports, and cultural activities, the very types of things that taxes would help too.

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