2,362 Millionaires Got Unemployment Benefits
(CNSNews.com) - There were 2,362 people who earned a million dollars or more in taxable income in 2009 and who also received federal unemployment benefits that year, according to a report by the Congressional Research Service.
In fact, these millionaires collectively raked in more than $20 million in unemployment benefits.
The Congressional Research Service report--Receipt of Unemployment Insurance by Higher-Income Unemployed Workers (“Millionaires”)--was published on Aug. 2 and was based on the most recent data available from the Internal Revenue Service.
“Among tax filers with AGI [Adjusted Gross Income] of $1 million or more, 2,840 reported receipt of unemployment benefit income in 2008 and 2,362 tax filers reported receipt of unemployment benefit income in 2009,” the CRS reported.
The CRS reported that millionaires received $20.8 million in federal unemployment benefits in 2009, up from $18.6 million in 2008. That averages out to $8,806 in unemployment benefits per millionaire.
Unemployment insurance is a joint federal-state program and is funded by a payroll tax assessed against all workers. In the four years preceding 2012, according to the Tax Foundation, the unemployment insurance system was in the red. "Between 2008 and 2011, $174 billion was paid in unemployment taxes while $450 billion was paid out in benefits, a gap of $276 billion," the Tax Foundation said.
Department of Labor regulations require that unemployment benefits must be paid to all unemployed workers regardless of their income.
"This requirement is based upon a 1964 U.S. Department of Laobr (DOL) decision that precludes states from means-testing to determine UC [unemployment compensation] eligibility," the CRS said in its report.
"Under this interpretation, federal law requires entitlement compensation to be determined from facts or causes related to the individuals state of unemployment," said CRS. "Thus, the DOL requires that states pay compensation for unemployment to all eligible beneficiaries regardless of their income level because individual or household income would not be considered to impact the fact or cause of unemployment."
In addition to the 2,362 people with adjusted gross incomes of $1 million or more who got unemployment benefits in 2009, there were also 8,335 people with incomes between $500,000 and $1 million who received benefits and 120,227 with incomes between $200,000 and $500,000 who received benefits.
On July 17, House Minority Leader Steny Hoyer said that unemployment benefits along with food stamps were the two most stimulative things the government could do for the economy.
"If you talk to economists, they will tell you there are two things that are the most stimulative that you can do--one’s unemployment insurance, the other’s food stamps, okay?” said Hoyer.
“Why is that?” Hoyer said. “Because those folks who receive those resources must spend them. And they’ll spend them almost upon receipt. Most economists with whom I talk believe that those with significant discretionary income, that that’s not the case.”