The three main goals for establishing a computerized lottery system are to satisfy the middle and lower classes' dreams of wealth, create employment for the handicapped and eliminate the national budget deficit. The government's main concern is, of course, the third item.
With frequent elections, opposition and ruling parties are issuing blank checks like their lives depended on it in order to get more votes. Apart from major public construction projects, high-expenditure social welfare measures are created, one after the other. Structural deficits often occur in the national budget, a trend that is on the increase.
What happens if revenues don't meet expenditures? The solution is to increase revenues and cut expenditures, but in order to curry favor with voters, there is no way expenditures can be cut. How to increase revenue has therefore become a thorny issue for the Ministry of Finance. There are three ways to do so:
First, by increasing taxes across the board. This will incense the public, something the ruling party dares not risk.
Second, putting the knife to the necks of the wealthy, cracking down on tax evasion and strictly reviewing tax exemption and tax reduction requirements. The problem is that it is easy to discover tax evasion among wage earners, while it's difficult to prevent tax evasion on profits, interest and land lease income.
If it wasn't for politicians exposing the skeletons in rival's closets, it would probably prove difficult beyond description for the public to find information about tax evasion among officials and businessmen. In particular, with the economy taking the lead (sidestepping fairness and justness), the Ministry of Economic Affairs and the Council for Economic Planning and Development often support the employers' viewpoint, demanding the finance ministry relax the conditions for tax exemption or tax reduction.
This leaves only the third option for increasing revenues, and that is to take from the poor to save the rich, ie, making the middle and lower classes pay up. A lottery is a tax following the law of least resistance. Even though the probability of winning is near zero, everyone harbors hopes -- so no one feels that they have been taxed.
One major reason why "the lottery for the public good" is "good" is that it creates employment for the handicapped. What the handicapped need most, however, is not the right to sell lottery tickets, but equal rights to education and educational environments, easily accessible public spaces, and an unprejudiced employment situation. This is the direction in which the government should direct its efforts, and also would yield the greatest good for the handicapped.
A TV ad for the lottery in California used to say that "it takes 10 years to grow a tree, but 100 years to bring up a generation of good men." The ad encouraged people to buy lottery tickets since 3 percent of the income would go to educational expenditures. The ad was successful, as it captured the importance people place on education.
The problem is that the lion's share of the income from California's lottery went to non-educational purposes, something that the ad did not mention. It is obvious that the uneducated who believed that they could support education by buying a lottery ticket were cheated -- the ad was simply trying to "pass fish eyes off as pearls" as the old Chinese saying goes -- and the government of California was the main schemer behind the plot. It was really tragic.
Lotteries are unfair and unjust, in Taiwan as well as abroad.
Lin Ching-yuan is an associate professor in the economics department of Tamkang University.
Translated by Perry Svensson
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