People who win prizes spend mindlessly without realizing that prizes do not come free. For every expense you make there is a hidden ongoing cost associated. This cost every winner has to pay as a cost for ownership. Popular as tax, people have to pay extra additional to the actual prize. After analysing all these factors, a winner will certainly understand that everything comes with a price!
Now let us take a few examples on how taxes can make every purchase a burden in the later stages.
A Luxurious House
When buying a house, you need to pay a lot of hidden charges that includes federal tax based on the value of the house. You may also need to pay state tax based on the state where your residence is. Additional charges like marginal rate tax and instalment interests. Apart from these charges there are additional costs that are recurrent in nature. Insurance, property tax, utility bills, maintenance, and interest on monthly instalments are the recurring expenditure that will make the winner goes crazy.
A luxurious Vehicle
Same as the home taxes, car also comes with hidden taxes. Taxes on the face value of the car, additional charges on the on-road price, licensing fee, car registration fee, state tax, and federal tax bills are some of the cost burdens that the winner will have to carry. If the car is a luxurious vehicle there will be extra charges like expenses on external appearance, expenses on interiors, fuel expenses, and maintenance costs. With so many charges to pay, you will wish you never had a car.
Vacations and Trips
With large winnings come large expectations. Your family and friends will expect you to travel in executive coaches or business class trains and flights. You will be expected to spend on top of the charts hotels. You will be expected to visit places that are extremely expensive. After a fortnight long vacation you will be left paying bills that never made any sense to you. With no scope of bargaining, you will see a major part of winnings flowing away.
Thus it is better to make well-planned decisions. With aggressive expenditure, you will end up spending all your winnings in haste. Investments and donations are better options that you can take.