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.
Effect On After-Tax Income
Effect On Economic Growth
Effect On Federal Deficit
Effect On Social Security Shortfall
Effect On Future U.S. Debt