When free is worse than full price

I've always wondered about people on game shows. They win nice things, like cars and vacations. They jump around and scream. But what they don't realize is that they have to pay taxes on those prizes.

In the case of cars or other tangible items, you can just sell it, pay the taxes, and pocket the difference. That's what some people did when Oprah gave away a bunch of cars last year. It's a little bit of work, but you end up pocketing $15,000 or so after taxes, so it's all good.

So poor Jack McCall, who thought he won lots of free American Airlines tickets, ends up having to pay $792. In taxes. Per ticket. I'm guessing he wouldn't find many takers to buy a ticket for more than $792. Especially since they would also need to be named Jack McCall. Needless to say, he declined the prize. (Here's another link ... I don't know if the Wall Street Journal leaves these links out there.

It sounds like a nice prize, but it's really quite awful. A nice deceptive marketing ploy by American.