More than 2,000 people with household incomes of over $1 million per year received unemployment benefits in 2009, according to a new report from the Congressional Research Service.
Congressional Republicans have seized on the data, calling for an end to unemployment benefits for millionaires as a means of reducing the national debt, Bloomberg reports. They made a similar proposal last year.
But the 2,362 millionaires received a total of $20.8 million in unemployment benefits in 2009, accounting for just 0.02 percent of all unemployment benefit income and representing 0.02 percent of all recipients, according to the Congressional Research Service's report. Eliminating unemployment benefits for millionaires would do almost nothing to decrease the $1 trillion federal budget deficit.
Economists say that jobless benefits are important to give the recently unemployed enough time to find jobs that match their skills and experience. And in fact, unemployment benefits go mostly to people who are less than wealthy. More than nine in 10 unemployment benefit recipients in 2009 lived in households making less than $100,000 per year, according to the Congressional Research Service's report. These recipients received 90 percent of all unemployment benefit income in 2009.
Meanwhile, wealthy Americans receive a slew of other forms of assistance that Republican lawmakers are seeking to protect. For example, the capital gains tax rate is just 15 percent, less than half of the top income tax rate of 35 percent. As a result, many middle-class workers are taxed at a far higher rate than millionaires and billionaires receiving passive income from their investments.
In addition, the Bush-era tax cuts, which predominantly help the rich, would cost the U.S. nearly $1 trillion in revenue over the next decade if extended, according to the Congressional Budget Office. Overall, the U.S. tax system is not very progressive: The top 1 percent pays a total tax rate of 29 percent, while the middle 20 percent pays a total tax rate of 25 percent, according to Citizens for Tax Justice.
Republican politicians have proposed maintaining these low tax rates for the rich, including extending all of the Bush-era tax cuts. Republican presidential nominee Mitt Romney has proposed further cutting taxes on investment income and eliminating the estate tax, which would disproportionately benefit the wealthy.
(Hat tip: Bloomberg.)
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