tax.com: Millionaires on Unemployment

Millionaires on Unemployment

Martin A. Sullivan | Nov. 30, 2009 09:42 AM EST

As Jackie Calmes reports in this morning's New York Times, a top priority for this Congress is to extend unemployment benefits before year end. For millions of families that depend on these benefits this will be welcome holiday news. But not all recipients of unemployment benefits deserve our sympathy. According to IRS data 1,972 Americans with incomes above $1 million received unemployment benefits in 2006. (Comparable data for later years are not available.)

In 2006 a total of $2.5 billion in unemployment benefits were paid to households with incomes over $100,000. In 2007 the comparable figure was $2.8 billion.

More recent data are available from the Bureau of Labor Statistics. Since 2007, along with the unemployment rate, total unemployment benefits have skyrocketed--from $32 billion to an estimated $81 billion for 2009 (estimate based on data through October).

Like social security, unemployment benefits are not means-tested. Anybody who earns a salary pays a small unemployment tax and is eligible for benefits when the job goes out the window. So fair is fair. These unemployed millionaires paid into the program. They should be able to take out. But there is something galling in these terrible economic times about Congress struggling to pay for these benefits when some of the recipients should probably be paying more in taxes instead of receiving benefits.

Comments (4)

Missing from this post is an explanation of why those with incomes over $1
million are less deserving of unemployment benefits than those with incomes
less than $1 million.

Posted by Sam Richard on Nov. 30, 2009 at 08:35 PM

So they should pay higher taxes.

Means tested benefits are difficult to administer and demeaning to the
recipients. They are also diffucult to defend politically because a substantial
portion of our population sees them as welfare.

Posted by Wonks Anonymous on Dec. 3, 2009 at 05:04 PM

Spoken like a true hater. In a country of 300million people, you are
complaining about less than 2000 people receiving the benefits they paid for.
Plus there only receiving benefits because they are unemployed. How many people
receiving benefits never pay ANY taxes?

Posted by Snake Lisken on Dec. 3, 2009 at 11:57 PM

Well, I think the question is who are the millionaires who don't mind trekking
to the unemployment office to pick up a $250 check?

To the larger point, it's certainly a reasonable question whether it makes
sense to cut a check to someone who earned a million dollars because they were
without employment for part of that year. That they were earning a million
dollars suggests that they have derived some benefit from their citizenship
over the years, and thus it make no sense whatsoever to say that anyone thinks
they are "less deserving" of economic well-being.

Posted by Jay Henry on Dec. 4, 2009 at 01:54 PM

Comment

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Posted by The New York Times Economix Blog on Dec. 3, 2009 at 03:13 PM

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