American Millionaires: 1,400 Paid No U.S. Income Taxes In 2009

New tax data from the Internal Revenue service shows that in 2009, incomes fell, unemployment claims rose, and the U.S. economy shed nearly two million taxpayers.

And of the 235,413 taxpayers who earned $1 million or more in 2009, 1,470 of them paid no taxes.

According to the data, the average income for American taxpayers fell to $54,283 -- a drop of $3,516, or about 6.1 percent, between 2008 and 2009. Not only that, but the overall number of taxpayers -- that is, individuals or married couples filing with the IRS -- fell by almost two million.

"What you're seeing is the devastation of the massive loss of jobs and the effects of the real recession on real Americans," said Ed Kleinbard, a law professor at the University of Southern California.

The numbers, part of a package analyzing 2009 tax returns that the IRS has just made available, reflect a grim picture of the recent past.

Tax returns filed in 2009 largely speak to the state of the economy in 2008 -- a time when unemployment ballooned, markets dropped precipitously and the economy languished in recession.

The IRS’s data is unlikely to surprise any of the millions of Americans who were out of work in 2008 and 2009. The unemployment rate climbed from 5 percent in April '08 to a 25-year high in February ’09, and continued to rise for several months, topping double digits that fall with a rate of 10.2 percent.

The IRS report shows that unemployment claims rose by nearly 2 million, or about 19 percent, between 2008 and 2009. The amount of unemployment benefits paid in 2009 nearly doubled from the previous year.

The number of 1040EZ returns -- the simplified tax form for filers who have no dependents, and whose taxable income is less than $100,000 -- fell by 23 percent between 2008 and 2009.

The decline in 1040EZs represents low-income taxpayers who lost their jobs and couldn't remain a part of the workforce, Kleinbard told The Huffington Post.

"What you're seeing is people at the bottom rung of the economic ladder being taken off the economic ladder entirely," Kleinbard said.

According to the latest figures from the Department of Labor, U.S. unemployment is currently at 9.2 percent. A new monthly report will be released Friday.

Loading Slideshow

• Effect On After-Tax Income

• Effect On Economic Growth

• Effect On Federal Deficit

• Effect On Social Security Shortfall

• Effect On Future U.S. Debt

Comments

[goldstockbull]

12:45 PM on 09/26/2011

If we end our illegal imperial wars and shrink the size of the bloated government, everyone could pay less in taxes AND we could balance the budget. We should not allow the government to be so large and wasteful. I would like to see a more equitable distribution of wealth, but trusting government to do it is foolish.

[Despyria]

12:44 AM on 08/30/2011

If you look at statistics those that report income, as in wages, over a million, it is actually a really small number. Only a tiny fraction of a single percent of all millionaires pay income tax on amounts over 1 million dollars. That is to say that more than 99% of all U.S. Millionaires don't pay income taxes on the money they make. Simply shifting what they pay taxes on which is by and large not anywhere near the tax rate most pay in income taxes.

Further that number also likely reflects that those people do not have an income at all, hence don't work and still have all this money. A lot of well known "Celebrities" come to mind. They are parasitic and have nothing to offer society other than their vapid personalities and trust fund debaucheries. All hail the "job creators".

[LibertyRoy]

11:04 PM on 08/29/2011

This article actually proves that the idea that the rich pay no taxes is simply not true. Only .006% paid not taxes which means that .994% did pay taxes. There goes the liberal notion that "if only the rich paid their fair share we could balance the budget" argument, eh!!! Please tell me what rate of tax on those 1470 would balance the budget??? A 100,000% tax?

[nitridr]

09:44 AM on 09/21/2011

If your math was correct then only 14 millionaire earners did not pay any income taxes. This is NOT what the article said. The correct percentage is point 6 %. The article did not say to take everything from them as tax, only to tax them at a similar percentage as working people pay. And as Despyria stated, many of the millionaire income people are able to write off things that are not available to the working people so they are not even including the same percentage of their total gross income to be subject to the income taxes. The ultra rich should be paying at least the same percentage of their gross incomes as the working people are paying now. That may not save the US but it would at least be FAIR.

[KDK0590]

11:26 AM on 09/26/2011

How do you come to misunderstand the terms "none" and "fair share", exactly? And if that many paid "none", then how many did not, in actuality, pay their "fair share"? I'm quite certain that you realized that your logic was flawed before you even post such a frivolous comment...right?

[Rooster Coburn]

10:53 AM on 08/19/2011

Millionaires paid an average tax rate of 22.4 percent in 2009, or $224,000.00 per million dollars of income. Do you? Note, average tax rate does not equal marginal tax rate, which is higher. If you and your spouse earned $50,000 each and each of you had $5000 withheld from your pay checks for F.I.T. (federal income tax) and didn't get a cent back when you filed your joint return then you would have paid an average of 10% in F.I.T. In reality you would in all likelihood have received a refund from the I.R.S., making your tax rate lower still.

[LibertyRoy]

11:06 PM on 08/29/2011

Almost always thew cause for this is the 15% capital gains tax rate, which makes up the majority of income for those above $1MM. Buffett is 99% of his income from capital gains, as do hedge fund managers.

Even though I am for small government, I am for ending the cap gains rate as an option for those above $1mm per year.

[nitridr]

09:51 AM on 09/21/2011

The millionaire income people would have earned more like 2-2.5 million before deductions. Much of that would be subject to only capital gains (after the allowed deductions) of 15%. So according to the situation you proposed, say 2 mil in gross earnings and 224 thou as the tax would be around 11% of their gross as income taxes. I am a middle class income worker. My taxes are around 17% of my gross. So is this fair? I do not have access to some of the deductions that the ultra rich do.

[Alice Schultz]

12:31 AM on 08/19/2011

One of the biggest business giants in America pays no taxes.
Who are these tax dodger? THE CHURCHES!
Yes people our places of worship pay NO taxes and when we go there most of us dig deep into our pockets for the collection plate.Then our money is taken and spent on religious leaders big salarys,big houses and fancy cars which no taxes are paid on either because it is all owned by the church. I in no way advocate that churches be treated any differently than anyone other business. And that is exactly what a church is--a business. They are in the business of selling an idea and making a profit off that idea. Then spending that profit
to expand their business.With our money they buy more property and accumulate more
assets that they pay no taxes on. A number of churches own television
stations, rental properties and even girdle factories whose only religious purpose is to produce church income.I believe churches should pay taxes based on how much property and
assets they hold,just like everyone does. The majority of the money flowing through churches goes towards expansion, maintenance,and special interests. And since tax exemption is a form of government subsidy, any formal involvement by these organizations in campaigning,
legislation, and/or lobbying should then be considered as being publicly funded.
Therefore, all religious organizations which have essentially forfeited their
private status should pay taxes as such. They should be treated like any other business.

[HST]

12:01 AM on 08/19/2011

Teapublicons think it's class warfare to ask people making millions or billions per year to give up a tax break or two. They really equate that with some sort of nightmare of mobs with pitchforks and torches. In fact, what has been going on since about the 1980s is indeed class warfare -- except it's only being waged by one side. The wealthiest among us have made out like bandits the last few decades, and they have done so at the direct expense of the American middle class. So if class warfare is being waged here, it's being waged in exactly the opposite direction as they claim. When the little guys start to fight back a little bit, that's only because of the last three decades of class warfare -- which they have been steadily losing.
Conservative Free Market based economic policy is delusional, unless you like the goal of making the wealthy richer. The wealthy aren't creating jobs they are hoarding. Corporations aren't reinvesting they are hoarding. American Conservatives are propaganda believers, deregulation has done nothing for the average American, other then reduce your standard of living.Conservatives are brillant propagandist, they revise history, blame others and have done a great job of manipulating forty percent of the population into believing lies as they get ripped off. When Conservatives control policy things just get worse.

[mslctv1]

09:33 PM on 08/14/2011

The way I see these numbers, over 99 percent of ALL MILLIONAIRES paid taxes. I guess this "no-tax loophole" is not very attractive. This article shoots down the myth that rich people don't pay taxes.

[drklassen]

10:04 PM on 09/01/2011

Nobody ever said they didn't. They said they don't pay *enough* considering the size of their slice of the pie. And that they didn't make any part of the pie, their workers did for them.

[KDK0590]

11:33 AM on 09/26/2011

This has got to be the second-most absurd interpretation I've seen on here so far. Typical twisting of the facts, however.

[Valerie Valentine]

01:53 AM on 08/10/2011

I read a article that said City Bank paid no taxes for 4 years, yet they were giving tax payers money to bail them out, when all the banks needed bailed out from the Government I wonder how many more Banks paid no taxes and got bailed out with tax payers money. It is so unfair I think this may be some of Bushes deals.

[Tick McClick]

06:55 AM on 08/09/2011

Typical reporting. Why did the 1470 not pay? Was it because they inherited the money? In which case it was already taxed and should not be taxed again! Need more information on this!

[drklassen]

10:06 PM on 09/01/2011

The "already taxed" argument is utterly bogus. All money that changes hands is "already taxed" at several points along the way. Thus, there is NOTHING inconsistent with taxing inheritances.

[WizardPrang]

08:42 AM on 09/30/2011

I read somewhere (I cannot remember where) that the 0.6% who paid no income tax was split between those who gave away most of their income to charities (and hence deducted) and those who's overseas businesses were taxed overseas (and hence correctly deducted those taxes from their domestic taxes).

If that is true, it is a case of "Nothing to see here, folks, move along..."

[Connie Kirkpatrick]

05:17 PM on 08/08/2011

The taxes they should have paid would have put a small dent anyway. Shame this country keeps letting the rich get richer and not challenging them. But then who would pay for the election campaigns and fancy parties. Really, now.

[LetMeOffThisPlanet]

08:58 PM on 08/09/2011

Why shouldn't "this country" (I assume you mean our government) allow people to prosper from the fruits of their labor. What incentive is there to work hard if everything you work for is taken away and handed to someone who doesn't have the drive to work for themselves. Will the person receiving the handout get the message that hard work pays off, or will they get the message that they can do nothing and get something?

It's the lower class that need to be challenged... don't settle for a measly handout... work hard and make your own success and you can make a much better life for yourself and your family.

[drklassen]

10:09 PM on 09/01/2011

1) Nobody ever said take everything---straw man argument.
2) Falsely ssumes the poor are poor ONLY because they lack incentive as opposed to the fact that most of them are held down by the very laws that allow the ultra-rich to exist.
3) Falsely assumes that the rich are that way because through ONLY their own industry, instead of stealing the productivity of the laborers and paying for laws that tilt the entire game in their favor.

[nitridr]

10:03 AM on 09/21/2011

Actually letmeoffthis planet, your assumptions are completely false. What fruits of their labor did the ultra wealthy have again? Ultra rich do not work in the sense of producing anything. The working class WORKERS actually produce the WORK. The working class WORKERS produce ALL of the money. The ultra rich "earn" (if you want to use that term loosely) their money by not paying the WORKERS a fair compensation and skimming off the top for bonuses etc and by not paying appropriate benefits. That is why there are so many WORKERS that are still under the poverty line. The ultra rich do NOT produce nearly as much work so their money is NOT off the sweat of their brow but off the sweat of the brow of the WORKERS. So give us a break. Working harder as a REAL WORKER will not reap greater rewards because the ultra rich have already skimmed most of the cream off the top. Hard work doe not actually pay. Your scenario does not show hard work as being compensated. It shows actually that hard work is actually cheated out of just reward and that more hard work would just be greater cheating.

[crom14]

04:38 PM on 08/08/2011

Insanity on some ones part.

[Ted Weissgerber]

01:04 PM on 08/08/2011

TAKE the money the "job creators" ARE NOT spending and let the Government create the jobs! We have LOTS of stuff that needs fixed in this country. Fixing the tax code to help the rich should NOT be one of them!

[ekg]

03:14 PM on 08/08/2011

Typical moronish comment.

[KDK0590]

11:39 AM on 09/26/2011

...and a typically moronish, and boorish reply in return. Touche.

[jwallstrom]

03:51 PM on 08/08/2011

Brilliant!!! I suggest you write to Charlie Rangel right now and tell him. Oh wait, he wrote a lot of that stuff in the code which has always been there and always will be.

[SocialistBoy]

07:16 PM on 08/08/2011

Why pick on ole Charlie: here are the big Kahunas!!!

http://www.jacksonfreepress.com/index.php/site/comments/bloomberg_barbour_friends_family_profiting_from_katrina/

http://www.mediaite.com/online/abc-news-questions-ties-between-newt-gingrichs-charity-and-for-profit-business/

http://newsflavor.com/politics/us-politics/breaking-news-donald-trump-is-a-con-artist/

[nypapajoe]

10:27 AM on 08/08/2011

Her irrational responses and thought process speaks for itself! You don't make crazy! You either one or you're not! Let's be serious here America does anyone with any degree of intelligence really believe that she has a shot at the presidency? People in the most remote parts of the Amazon jungles are betting that Pee-Wee Herman has a better chance! Come on now, the only ones that swear to this lunacy are the Baggers and they are supporting the very people who want to destroy their lively hood by privatizing Medicare and Social security, now how irrational is that? People you can't make this stuff up! If you listen to anyone other than right wing propaganda being spewed by the corporate owned media and talking heads of the Neo nazi right you will be amazed by what you can learn! This has nothing to do with socialist, communist doctrine! It's about the democratic process and fairness where the people dictate not the other way around, where we help our neighbors, feed our kids and earn a decent living and receive great health care and have a retirement plan to depend on later in life!

[faithva]

09:42 AM on 08/08/2011

Stats released and reported on HuffPast show that US is 15th on the list of countries taxing their citizenry. Corp rate is 35%, but US actually takes in 23% from corps. Tax total is 40%. Canada (13th on list) is 46.4% total tax, with corp actually taxed at 27.6%. Germany (9) taxes 47.5% with corp tax at 30.2%. Finland (7) is 47.8% total with corp rate at 36%. Australia (12) 46.5% with corp rate 30%. Austria (6) 50% with corp rate 25%. Japan (5) 50% with corp rate 39.5%. Netherlands (3) 52% with corp rate 25.5. Sweden (1) total tax 56.5% with corp rate 26.3.

With US actually receiving only 23% from corporations, it is one of the lowest corporation taxes on the list. AND - big time! - of 235,413 people earning $1 million+, 1400 paid NO TAXES at all. And you guys want to feel sorry for these jerks!!! AND, WHERE ARE THE JOBS THEY ARE CREATING????? IN THAT ALTERNATE UNIVERSE YOU LIVE IN!

[LetMeOffThisPlanet]

09:06 PM on 08/09/2011

Corporate taxes... hmmm... how about the company officers, employees, etc. Do you think they pay taxes on their income? Yes... yes, in fact they do. What do you think their salaries are, and what do you think their tax rate it?

Also, while your digging up facts, realize it's not enough to just look at the numbers. Find out WHY 1400 paid no taxes.

[jwalter]

02:10 AM on 08/08/2011

who do you think writes the tax codes?