Millionaires on Unemployment? There Must Be a Better Way
When future historians tell the tale of the worst economic slowdown since the Great Depression, they will have plenty of stories about how people persevered against great odds. And it's not just the average working stiff who had it bad. Even the millionaires among us suffered, apparently.
According to Bloomberg News, data from the IRS shows that 2,840 households reporting at least $1 million in income on their tax returns that year also collected a total of $18.6 million in unemployment benefits in 2008. There were 806 taxpayers with incomes over $2 million and 17 with incomes in excess of $10 million collecting benefits. Data from 2009 was not available but odds are that the figures haven't changed much, given how the economy continues to struggle to rebound.
The problems of a bunch of unemployed millionaires probably will not elicit much sympathy from most Americans, who surveys show continue to be worried about their financial futures. Wealthy people, though, have their share of troubles too. As The Wall Street Journal noted Friday, many wealthy home sellers are slashing the prices of their estates in order to unload them.
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As debate over the Bush tax cuts heats up, the plight of the downtrodden wealthy is becoming more visible. President Obama favors letting the cuts lapse for those people who earn over $250,000. Republicans don't want them to lapse when they expire at the end of the year. Some economists, including Alan Greenspan and David Stockman, have argued that the U.S. economy is in such dire straights with a deficit topping $1 trillion that it can't afford to cut anyone's taxes. Stockman estimates the Bush tax cuts costs $300 billion a year. The rich, some experts argue, don't need the help.
"Recently released Census data confirm that the wealthy are back on track after suffering only minor setbacks," according to a statement issued today by the liberal Center for American Progress. "Incomes fell across the board from 2007, before the recession began, to 2008. Everyone took a hit, from the poorest quintile to the richest. But that's where the shared pain ends. From 2008 to 2009 almost everyone's income continued to fall except the rich. The richest 5% of Americans saw their average income rise last year by $1,800."
To be sure, wealthy people are entitled to receive unemployment. Some even demand it. New Jersey Education Commissioner Brett Schundler, who retired from Wall Street, told the media that he insisted that Gov. Chris Christie fire him after a row over a botched federal education funding request so he could collect benefits. It can't be for the money. Benefits average $300 a week.
Like those in the middle class, the wealthy may argue that they should reap the benefits of the taxes they have paid over the years. But the U.S. economy is in such bad shape that the government must change the way that it doles out expensive entitlement programs such as unemployment. Budget deficits in 46 states equal $112 billion for the fiscal year ending next June, thanks in part to the costs of assisting the jobless. States pay for the first 26 weeks of unemployment.
Giving aid to those who are wealthy but entitled leaves less for the poor and needy. There has to be a better way.
