I have highlighted before the $5 and then $3 dinner raffles run by Obama to get names for his fundraising list. Other candidates have used such gimmicks, but Obama by far has been the most aggressive, running them for months.
Technically, these raffles are “sweepstakes” because you can enter without paying anything, although at least a $3 donation is encouraged. This not only adds to Obama’s mailing list, it increases the number of donors and lowers the average donation, both of which figures are used in Obama campaign spin.
This ad I saw online today caught my eye, as it reminded people that airfare was included for the winner. I had not seen that before, although the airfare promotion may have run before and I just didn’t notice:
I clicked on the image and it took me to this screen:
Just below that I noticed this “fine print” talking about “retail value” of the packages. Hmm, that sounded like the game show prizes, which are taxable:
Then the Dinner sweepstakes rules were even more clear that this might be taxable and that taxes are the responsibility of the winner:
And sure enough, the IRS treats such prizes as taxable ordinary income:
The Obama dinner contest rules break down the “retail value” of each prize at $1600 per package, if airfare is included, and $200 if it’s just dinner:
So, assuming you take Obama up on his offer to “cover” airfare, your taxes could be several hundred dollars, depending on your federal marginal tax rate and any state income taxes.
That $3 sure is expensive, and when Obama says he has you covered, he doesn’t.
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