When benevolent Tycoon John Beresford Tipton passed out checks in the 1950s television series The Millionaire, the recipients wound up with a cool $1 million tax free. No such luck awaits the million-dollar winners of state lotteries. Though the lottery commissions hardly emphasize the fact, they arbitrarily dole out their millions in installments of $50,000 a year over 20 years, all of it taxable. A winner with no other earnings to boost his tax rate further will end up with, at best, about $30,000 a year. In short, what you see emblazoned on...

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