Neoliberalism can be conceptualized as social, political, cultural, and social transformations that incorporate the principles of rugged individualism, open markets, and maximized profits. Though its origins are debated,1 its consequences are quite clear. Its rise is among the markers of an end to America’s unprecedented growth, not to mention fundamental changes in the political economy. Neoliberal-inspired changes have: further concentrated capital through state withdrawal from certain sectors of private industry (Harvey, 2005), deindustrialized many manufacturing-based cities by corporate abandonment (Wilson, 1996), globalized markets that know no borders and frequently leave nation-bound peoples jobless in their wake (Sassen, 1998), divested from the welfare state and enhanced regulation of the poor (Piven and Cloward, 1982), displaced high-paying industrial jobs with low-paying, service-sector ones that are less stable in the long term (Fischer and Hout, 2006), and instituted increasingly regressive tax structures that thwart capital redistribution (Prasad, 2006). Altogether these factors have eroded the tax base and curtailed the ability of federal, state, and local governments to generate money. The proliferation of state lotteries is a part of these larger neoliberal trends, particularly when it concerns the changing arrangement of American tax codes. Journalists Barlett and Steele (1994) contend that since the 1970s a number of legal reforms began shifting tax obligations:

• From corporations to individuals. • From foreign corporations to domestic corporations. • From foreign investors to American workers. • From multinational companies to medium-sized and small businesses. • From the federal government to state and local governments, whose taxes already fall

most heavily on those in the middle and at the bottom. (p. 14)

While it can be argued these trends began before 1970, the notion that tax obligations have shifted from elite interests onto those least able to pay is generally correct. Through a series of reforms federal tax codes have replaced progressive taxes with regressive ones. Let us consider some data from the Office of Management and Budget (2010). Since corporate taxes peaked in 1947 at 7.2 percent of Gross Domestic Product (GDP), these revenues have gradually declined to levels comparable to before the New Deal era (see Figure 6.1). In 2009, corporate taxes comprised only 1.0 percent of GDP. Meanwhile social insurance taxes have steadily risen over time from 1.5 percent of GDP in 1947 to 6.3 percent in 2009. Individual taxes have fluctuated over time, and their fraction of GDP has ranged anywhere between a low of 5.7 in 1947 to a high of 10.2 in 2000. As of 2009, the combined individual income and social insurance taxes generate more than 12 times the revenue derived from corporate income taxes. Shifts in the federal tax composition foreshadowed and shaped what would later occur in state and local governments. Under the Reagan Administration, states were delegated more responsibility in administering and financing welfare programs (Piven and Cloward, 1982). This ultimately meant that states played a larger role in satisfying services like Medicare and Medicaid, not to mention infrastructure upkeep like highway maintenance. Given these public services cannot be provided without sufficient funds, states were positioned to revise their tax codes and collect levels of unprecedented revenue. All the while, economic insecurity caused by neoliberal shifts in the political economy left many Americans feeling financially pinched, especially as real incomes stagnated and increasing tax debts loomed.