IRS reveals millionaires claiming unemployment benefits
Hard data from the IRS backs up what we knew to be the case: The recession hit the country hard. But the numbers also tell a shocking, much lesser-known story: Quite a few millionaires were claiming unemployment benefits, too. So while millions of Americans with struggled to keep their homes and feed their kids, a few thousand millionaires, though in not nearly as bad shape, were on the dole, too.
Giving some super-rich folks the benefit of the doubt, if you will, it appears some of them didn't have such a spectacular 2008. Seventeen of those 13,480 taxpayers who reported income of more than $10 million found themselves standing in the unemployment lines alongside nearly 9.5 million other Americans in 2008. Unemployment benefits for those taxpayers averaged $5,765. The number claiming unemployment benefits increased to nearly 3,000 for those taxpayers who reported overall income of more than $1 million.
Of course, unemployment benefits were up across the board -- nearly 25% -- at all income levels. The super poor to the super rich reported a collective total of $43.7 billion in unemployment benefits.
While those statistics may stand out merely because of the staggering amount of income involved, it's interesting that the overwhelming share of income in the top tax bracket isn't related to wages or salary. Less than 20% of the income at the top is attributable to actually working. The lion's share of income for those taxpayers at the top comes in the form of capital gains income -- even in a down economy. Lucky for those taxpayers, capital gains is generally tax favorable.
As Congress struggled this year with whether to extend benefits for those who are unemployed, questions about who should be able to claim benefits (and under what circumstances) took center stage. These taxpayer stats -- the first time the IRS has provided this level of detail on taxpayers in higher tax brackets -- will likely raise those questions again. Specifically, the discussions will revolve around whether it is fair for the super rich to claim unemployment benefits.
The rules for collecting unemployment are surprisingly easy in most states. To qualify, you generally have to earn sufficient wages (yup, the millionaires did that), suffer a job loss through no fault of your own, and meet certain criteria moving forward (usually making yourself available for work). There's no upper limit on the amount of money you can make to otherwise claim unemployment. In other words, you can't make too much money to collect; ironically, you can make too little money to claim unemployment.
The numbers of those unemployed taxpayers added to the overall grim economic picture for 2008. The IRS statistics show that total income reported on tax returns for 2008 was $8.3 trillion, a decline of nearly 5% from 2007. Factoring in the cost of inflation, the real drop was 8.4% -- the biggest dip in income in 20 years.
Even those in the top tax bracket took a hit -- there were fewer super-millionaires in 2008. Those reporting income of more than $10 million tumbled 25% to just 13,480.
The number of taxpayers reporting at least $1 million in income also dropped. Overall, the number of millionaire wage earners took a tumble of nearly 22%. The total income reported by those millionaires was a whopping $1.08 trillion, or about 13% of all income.
Even as millionaires garnered unemployment, they also reaped Social Security benefits, too. Nearly 57,000 taxpayers who reported more than $1 million in income in 2008 also collected Social Security payments. Taxpayers who pay into the Social Security system are entitled to payouts at certain ages. As the trust fund depletes (with concerns that it will run out at some point between 2040 and 2080), many believe that Social Security distributions should be income dependent.
All this makes me wonder: Should any government benefits be income dependent? Or should you be allowed to receive benefits irrespective of your income level?
For more information about income levels and classes of income, check out the Tax Statistics page on the IRS website.
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Reader Comments (Page 1 of 5)
7-30-2010 @ 2:47PM
Ryan said...
That is mind-boggling but true. Because parts of the tax code are so archaic there are many loopholes in which a significant portion of households don't pay any income tax. This year, for instance, the 2010 estate tax has effectively been repealed. But, the impact to you may depend on the language in your estate tax documentation http://www.bidawiz.com/estate-tax-questions.aspx
Reply
7-31-2010 @ 3:09AM
Bobio said...
So, Rush Limbaugh reached into his pockets and realized
he didn't have enought cash to have his maid go out
to buy his drugs and needed some news laws passed.
So, what else is new?
7-31-2010 @ 6:16AM
tongcexinfei said...
The Emmy-winning actor, who played John Locke on 'Lost', has landed a lead role in the upcoming Lifetime movie 'Taken From Me: The Tiffany Rubin Story.' My boyfriend thinks the same with me. He is eight years older than me, lol. We met online at agelessming le. c om a nice and free place for younger women and older men, or older women and younger men, to interact with each other. Maybe you wanna check out or tell your friends.
7-31-2010 @ 11:07AM
Charlie said...
I'll bet they paid into the system; therefore they are quailified to receive benefits while they look for anotehr mult-million dollar position.
Hey it's tough to keep up the payments and upkeep on your 10,000 foot NYC townhouse and keep the garage over your 4 leased Beemers and 2 Hummers.
Some may even qualify for food stamps...
7-31-2010 @ 11:21AM
Beth said...
It's also possible to work as an employee at home. That's what I have done for 10 years. I am not rich, but I do make $30K working 4 hrs a day so I can do my other job (taking care of my home/family). The internet has opened up so many REAL jobs that can be worked from home. BestTopJobs has a FREE list of hundreds of real work at home jobs offered by well known companies. These jobs do NOT cost you money. These are employment positions.
7-30-2010 @ 3:10PM
Henry said...
FedEx denies employees time off to attend their FATHERS' funeral.
Go to YouTube, search word: FedEx Inhumane Treatment.
Reply
7-30-2010 @ 10:51PM
Tony said...
If you don't like your jobs go find another one instead of constantly compaining about how badly you are treated there. Better yet, give you job to an illegial alien. Your democrats are trying very hard to bring in as many illegials as possible and they have to work somewhere, don't they?
7-31-2010 @ 8:04AM
Dave said...
SCREW YOU TONY. DEMS DO NOT WANT ILLEGALS HERE. GET YOUR FACT STRAIGHT then take your political BS where someone cares!
7-31-2010 @ 12:07PM
Tony said...
Oops... looks like I hit a nerve with big Dave here. When someone says you are wrong and can only curse back instead of saying why they are wrong, then there are truly a democrat. Hey Dave, have you heard of the State of Arizona? SEIU by the thousands were bused all the way from California to tell the Republicans there to leave the illegals alone. Have you heard of the president Obama? He also says the Republicans should leave the illegals alone and let them do what they want. Are you so uninformed that you think SEIU is a labor union that is for the Republican Party? Ha-ha-ha... wow are you uninformed.
7-30-2010 @ 3:19PM
RMI said...
I'm self employed guess what? NO BENEFITS PERIOD! There are millions of free lance and self employed who are completely unprotected!!!
Reply
7-30-2010 @ 4:54PM
dean said...
"Unprotected"?? Are you an idiot?? If you want "safety" get a job with benifits. You are self employed nd want all the benifits of "self employed" like cheating on your taxes, working in your underware and now you want "goof off job" insurance. Get real....
7-30-2010 @ 5:22PM
Rebecca said...
Dean, i work for myself at home, mostly because when my son was in daycare, all the money i made would go to daycare. I am a single parent who gets NO support from my ex. I work HARDER than just about anybody i know to make things happen, much harder then ppl who don't care because they're earning the same wage either way. I bust my butt and feel that i deserve the benefits that other ppl get when i'm having to struggle to get though a hard period, too. PS-i do work in my underWEAR, not underware, and do NOT have a "goof-off job, nor do i cheat on my taxes, thank you very much!
7-30-2010 @ 9:10PM
Jeff said...
Well what Dean does not understand is that self employed people, like myself, have seen their incomes drop by over 80% since 2005, and I still work up to 7 days a week generally, all hrs of day, have an office, and bills to keep things going. As a self employed person I also pay into social security, medicare, disability, workers comp, and into unemployment, but I do not qualify for any of these. I also pay out of pocket $1,500 a month just to have health insurance, but dont use it. I may qualify for social security in about 25 years when I might retire, and have been paying into social security for 30 years now, so will have a 55 year contribution, but I am sure it will be long gone. The self employed are the go getters and doers of the nation, not the folks who expect to get entitlements from the govt. for doing jack, and especially the politicians who cant make it in the real world, so they milk the system they dont contribute to. Work for someone else, and you may get by, work for yourself and you have far better chance of happiness.
7-30-2010 @ 7:44PM
TPR said...
You need to s-corp your business. You pay your self a wage, pay the social security, medicare and unemployment benefits
and then you can get these benefits
7-31-2010 @ 10:45AM
Beth said...
It's also possible to work as an employee at home. That's what I have done for 10 years. I am not rich, but I do make $30K working 4 hrs a day so I can do my other job (taking care of my home/family). The internet has opened up so many REAL jobs that can be worked from home. BestTopJobs has a FREE list of hundreds of real work at home jobs offered by well known companies. These jobs do NOT cost you money. These are employment positions.
7-31-2010 @ 12:08PM
Fed up said...
RMI, you are 100% correct! I am also a self employed business owner and we all are required to pay our taxes no matter who you work for. Keep in mind that the self employed/business owners get the delight of paying additional 7-8% in taxes yet we are not "qualified" to reap the rewards of certain government programs. It doesn't matter if you earn $0 dollars in a given year, (basically unemployed) you do not qualify for unemployment. What's wrong with that? We pay for it but cannot use it. What it really is; it's politicians deciding what we pay and who gets the rewards.
I fully support the fact that these so called millionaires are able to collect unemployment and social security. The facts are that if you pay into the Social Security system over your lifetime you are ENTITLED to your benefits. Yes I said entitled, thats the only time you will ever hear me say that but it is your asset. It doesn't matter if you make $50k a year or $50 million a year they both paid into social security over their lifetime. The whole idea of some politician deciding who should or should not get benefits that you paid into your entire working lifetime is absolutely insane. If that was the case then the same argument could be made that if someone (and there are millions) sat on their butt their entire life collecting food stamps and other forms of government assistance then they should not be eligible for social security benefits because they did not pay into the system. I am talking about the lazy people not the amall percentage of the population that truly needs assistance. I am all fo helping thos folks.
I guess my point is that yo cannot take from one group of people and give to another group of peole because someone says it's right.
At this rate, I see the USA in the same shape as Greece in about 10 years. God help us all!
7-31-2010 @ 1:15PM
Steve said...
Quit complaining. Either get a job with UI benefits or save your money for retirement and hard times. How can you make a life choice and then complain to others that you made that life choice?
7-30-2010 @ 3:56PM
Holly Marcyoniak said...
SINCE WHEN, ISN'T THERE A LIMIT ON HOW MUCH IS EARNED IN ORDER TO QUALIFY FOR UNEMPLOYMENT???????
THERE HAS ALWAYS-----BEEN-----WHAT HAS OBAMA & HIS HENCHMEN CHANGED THAT TOO ?????
Reply
7-30-2010 @ 5:00PM
Patty said...
You are a no-brain twit.
"you generally have to earn sufficient wages (yup, the millionaires did that), suffer a job loss through no fault of your own, and meet certain criteria moving forward (usually making yourself available for work).
These rules apply to everyone applying for unemployment and are the same as when I did 30 years ago.
Your screaming (cap letters) doesn't make your make your comment true, just hysterical.
7-30-2010 @ 5:11PM
Patty said...
The fact you can vote scares the heck out of me.
This is a ceiling on how much you can collect. A fact you can find very simply.