A RESEARCH Group suggests European Union Lottery as a stealth tax based on Spanish experience.
The Centre for Economic Policy Research was founded in 1983 to enhance the quality of economic policy-making within Europe and beyond.
Its online portal VOX EU publishes theories put forward by some of its 1,600 economic research fellows and its latest, appearing on May 28 uses the success of El Gordo, the Spanish Christmas lottery as an example of outside the box economic thinking.
It argues that as countries attempt to refinance their economies following the financial assistance they had to give to consumers and companies during the pandemic, that a European Union run lottery could generate significant income for member states both for individuals and as a form of unrecognised taxation.
The study highlights the role of lotteries as a way to stimulate local demand and improve economic sentiment, apart from their role as an effective tax collection device.
The researchers suggest that lotteries could kill two birds with one stone, increasing tax revenues voluntarily and also stimulating consumption and consumer confidence in the winning regions.
According to the popular view, Spaniards play the lottery collectively and view lottery expenditure as a part of Christmas spending and not as a tax.
So, to confirm this argument, they tested whether Christmas Lottery expenditures affect differently households’ durable consumption responses in winning compared to non-winning provinces and discovered that there was no perceivable difference.