Question

Why have lotteries and legalized gambling gained favor in terms of sources of revenue? advantages and disadvantages of such a revenue source. discuss and defend your position on whether states and localities should rely on such sources.

Answer 1

Ans) The cost benefit analysis Casino proponents argue that casinos will create tax revenues, jobs, and can push average wages higher. Opponents argue that the social costs, such as crime, industry “cannibalization,” and problem gambling, outweigh the potential benefits. Both sides discount the opposition's claims.

- Perhaps the most important political benefit of casinos is tax revenues. Although in most states legalized gambling provides a very small proportion of state tax receipts (usually far less than 5%), casino taxes do make it easier for politicians to avoid spending cuts or other tax increases.

- Revenue allocation options, it is important to separate those methods that give local gov- ernments some policy discretion (i.e., independent local taxation, centrally-assisted local taxation, and surcharges on national taxes) from those that are essentially revenue transfer programs (i.e., tax sharing and revenue sharing grants).