Have you heard about Amanda Clayton? She’s the $1 million lottery winner who is using food stamps to buy groceries. A lot of people are furious that she would have the audacity to continue receiving benefits after winning so much money.
Look at some of the comments on the original article:
Those are some pretty hash words.
Before we go any further we need to clarify something: she is legally entitled to food stamps. There is no law in Michigan that says you can’t be on food stamps if you win the lottery (although they are trying to pass a law now that would do exactly that).
Amanda Clayton is a Law Abiding Citizen
I’m not angry at Amanda Clayton. She’s obeying the law and taking the benefits she is legally entitled to receive. You might think certain tax laws are stupid, but that doesn’t mean people have an obligation to willingly reject benefits or give the government extra money (see: Warren Buffett).
I made over $60,000 last year, but I legally lowered my tax burden via 401k contributions, HSA contributions, charitable donations, student loan interest deductions and investment losses. I didn’t “need” to reduce my taxable income to keep a roof over my head and food on the table; I did it because I had a legal right to do so. Does that make me a bad person? Hardly.
The Government is Too Dumb to Get Charity Right
This situation is a great example of why the government is so terrible at “charity”. They can’t even write the rules well enough to prevent people with a net worth of hundreds of thousands of dollars from receiving the benefits.
Let’s not forget that people can legally use food stamps for unhealthy foods like soft drinks, candy, cookies, snack crackers, and ice cream. They can also use food stamps for luxury foods like steak, seafood, and bakery cakes. What a great use of our tax dollars!
Why don’t we reduce taxes and let charities and communities be responsible for feeding our neighbors?
Food stamps didn’t even exist until 1932. Think about yourself, your neighbors, local charities and churches. Do you think all of those people would allow your neighbors to starve or be malnourished? Of course not. Do you think those people would do better than the government in ensuring hungry people get healthy food and don’t abuse their services? I think so.
Don’t Blame Amanda Clayton
Amanda Clayton won a $1 million lottery. She took the lump sum payment which reduced it to $700,000. She paid federal and state taxes which reduced it to $490,000. Then she bought two houses and a car, which probably leaves her with $200,000 at most.
She’s 24 years old and doesn’t have a job.
She’s smart enough to realize that her lottery winnings aren’t going to last her a lifetime, and she’s legally accepting $200 of monthly benefits from the state (to which she just gave $30,000 in taxes). If you don’t think she deserves the benefits, then don’t get mad at Amanda Clayton; get mad at the state of Michigan and the government’s horrible mismanagement of providing food assistance.
Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
Thank you.
She didn’t make $1,000,000 this year. She “made” it last year. She also probably only received half of that after taxes and lump sum payment.
This year, she has no job, she has no income, she is legally entitled to government assistance.
Don’t like it? Call your elected officials, this is their fault for not drafting and passing adequate laws.
I think this is a prime example of “Just because you CAN doesn’t mean you SHOULD.” We live in a world where people feel entitled to things. Just because you can take out bankruptcy, does that mean you should? Just because you qualify for Medicaid, does that mean you shouldn’t do your best to pay off your bills yourself? I think Americans’ sense of entitlement has taken the morality out of them.
As far as this lady…how long are food stamps gonna last her? They’re not going to pay the property taxes on her $1 million house. Why on earth does someone with no job buy two houses? I can understand the car, but two houses? And if the house is worth $1 million, she couldn’t have bought it outright, because she didn’t get that much money, so where are the payments gonna come from? What a doofus. At least she put it into something she can sell later and get some money out of, because I’m betting that’s what she’ll have to do.
Agreed!
Great point. I was stunned when I heard about this story, but I agree, the government is to blame for not writing the law properly. However, I’m with tboofy, just because you can, should you? On a smaller scale, it’s like those gas stations with a tray of pennies to help with small change. Should you grab all the pennies because it’s free for the taking? Half of the fault goes to the government and the other half falls on Clayton.
I have a couple of issues with this…
First, if government completely does away with welfare, what is going to stop those people who used to abuse that system from going to scam charities and churches? They don’t run background checks there either to make sure you actually need help. I know many churches who will just give money to anyone that comes up and asks because they are going through a “rough time.” Or people who load up food from food banks in their new BMWs… Where is that outrage?
Why can’t we blame Amanda for not holding herself responsible (as Ron Paul teaches) to realize that even though she is legally able to receive welfare, that she shouldn’t? The system is supposed to be a safety net for those who can’t care for themselves or their families without it. Many people actually DO need this, so to ask for a handout when you were foolish enough to buy two houses is disgusting. Yes, I absolutely blame Amanda for not educating herself about money management and for her sense of entitlement.
Just because the system is broken doesn’t mean the idea is terrible. I’m sure there are many more stories of children who have food on their tables because of food stamps.
Almost every system gets abused by someone and I think this is a very rare case and doesn’t undermine the entire system.
But surely you don’t think the government should tell people what they can and can’t eat, right?
In response to the posts above:
By that logic this same thing can be applied to wealthy individuals paying a 15% effective tax rate, because all of their income is capital gains/dividends.
Just because they CAN take the 15% doesn’t mean they SHOULD.
CAN vs. SHOULD is not a viable argument.
What does that have to do with anything? Just because I CAN go to the local food bank to ask for food, knowing full well I can afford my own, doesn’t mean I SHOULD. What stops me? Morality. Just because it’s not illegal doesn’t mean it’s not wrong.
Morality is not a viable argument. Wrong to you may not be wrong to another.
That’s ridiculous. Morality and what we consider right versus wrong is how society functions and laws are made.
I live in Michigan, recently applied for Food Stamps, and can say that this is completely off-base. Please research your topic next time so you aren’t basing it completely off of a strawman.Michigan already (as of last year) asset tests food stamp recipients. If you have more than $5000 in the bank or have a car worth more than $15000 (you have to send in your registration for *them* to determine), you will be denied food stamps. This does *not* take into account debt – if you take out a $5000 loan, your net worth may not have changed ($5000 asset – $5000 debt), but you are now disqualified from food stamps. If this person won a million dollars, they *cannot* get food stamps. Even if they bought cars with it and had no money left, they would still be disqualified.I was disqualified for food stamps because, even though I have >$30,000 in student debt and am out of school without a job at the moment, I have assets of over $5000. That is my emergency reserve (I am without health insurance as well, of course), and while I am living off it now, I was hoping to be able to use food stamps to stretch it out a bit farther, just in case this jobless streak lasted longer than hoped. The food stamp people advised me to take all my emergency savings and use it to pay off a loan such that I would then have a smaller amount of assets and therefore qualify. This seems ridiculous to me, as it in no way changes my net worth, it just removes my buffer and makes life a bit more precarious. So yes, I could apparently qualify if I was financially stupid, but I’m not going to be and I suppose I’ll have to survive without the $100 food assistance a month.Yes, I am sure it is hard for the state to determine eligibility requirements such that they help only people who *really* need helping. The line is fuzzy. But I think that they have gone too restrictive now instead of too lax, and people who actually do need help are not getting it. Until you’ve actually had to deal with the food stamp agency (or have actually researched the rules), it’s crazy to express such outrage over something you don’t know much about.
The Government should change the rules and account for assets when they’re considering someone for food stamps. It’s not right that she’s sitting on a ton of assets, and a fair amount of cash… and still taking advantage of the Governments hand-outs – that are specifically intended for people who can’t afford to buy groceries.
What I find interesting is that people are expending such a large amount of energy condemning this – I think it’s reprehensible, but this lady’s use of food stamps isn’t even costing us a millionth of what tax loopholes for large businesses costs us.
I think it’s hilarious that this post was written by the same blogger who once claimed that a person giving a coupon to another customer in a store was stealing from th store…also the same blogger who questions a persons morals because they LEGALLY exercise their right to allow their home to be foreclosed on…but you think no one should be mad at this chick? Are you serious with this stuff?
I agree that we should be mad at our elected officials, but that doesn’t mean she is off the hook. There are many things that are/have been legal, but that doesn’t make them right. Just because you find a weakness in the system, doesn’t mean you should exploit it. BUT if you choose to be an unscrupulous person…fine…but don’t be surprised when people are pissed. The comments were harsh, but people are just tired of people not being productive members of society and causing us to become weaker….
Woops, she accidently became one of the 1%’ers. I have a feeling it will be a short lived experience.
Here’s a link… She is no longer getting food stamps!
http://www.huffingtonpost.com/2012/03/08/amanda-clayton-michigan-lottery-food-assistance-stamps_n_1330716.html
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She is now being charged with welfare fraud and could get up to 4 years…
http://news.yahoo.com/michigan-lotto-winner-charged-welfare-fraud-132900962.html