Millionaires Go Missing

Discussion in 'Economics' started by misterno, Aug 17, 2011.


    Speaking of "millionaires and billionaires" (see above), the real tax news is that there are fewer of both these days. This month the IRS released more detailed tax data for 2009, and the nearby table records the decline of the taxpaying rich.

    In 2007, 390,000 tax filers reported adjusted gross income of $1 million or more and paid $309 billion in taxes. In 2009, there were only 237,000 such filers, a decline of 39%. Almost four of 10 millionaires vanished in two years, and the total taxes they paid in 2009 declined to $178 billion, a drop of 42%.

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    ...Those with $10 million or more in reported income fell to 8,274 from 18,394 in 2007, a 55% drop. As a result, their tax payments tanked by 51%. These disappearing millionaires go a long way toward explaining why federal tax revenues have sunk to 15% of GDP in recent years. The loss of millionaires accounts for at least $130 billion of the higher federal budget deficit in 2009. If Warren Buffett wants to reduce the deficit, he should encourage policies to create more millionaires, not campaign to tax them more.

    The millionaires who are left still pay a mountain of tax. Those who make $1 million accounted for about 0.2% of all tax returns but paid 20.4% of income taxes in 2009. Those with adjusted gross income above $200,000 a year were just under 3% of tax filers but paid 50.1% of the $866 billion in total personal income taxes. This means the top 3% paid more than the bottom 97%. Yet the 3% are the people that President Obama claims don't pay their fair share. Before the recession, the $200,000 income group paid 54.5% of the income tax.

    For the past three decades, the political left has obsessed about income inequality. As the economy experienced one of the largest and lengthiest economic booms in history from 1982-2007, the left moaned that the gains went to yacht club members.

    Well, if equality of income is the priority, liberals should be thrilled with the last four years. The recession and weak recovery have been income levelers. Those who make more than $200,000 captured one-quarter of the $7.6 trillion in total income in 2009. In 2007 the over-$200,000 crowd had one-third of reported U.S. taxable income. Those with incomes above $1 million earned 9.5% of total income in 2009, down from 16.1% in 2007.

    It's an old story: The best way to produce income equality is to destroy trillions of dollars of wealth. Everyone loses, but the rich lose relatively more than the poor and the middle class. By that measure, if few others, Obamanomics has been a raging success.
  2. Nice story cherry picking data that includes the worst stock market run in 70 years ~

    No ideas in that article on why the reduction of income ? I don't suppose that tax loss selling had anything to do with it ? I wonder why that article didn't show a 10, 20, 30 year period ?

    When the top 400 richest people in the US own as much wealth as the bottom 50% (160 MILLION people) there is something terribly wrong with the system.
  3. zdreg


    not really. that is nature's way. it is the same with polygamy. some men can satisfy ten women while some women let themselves be stuck with the yodels on ET.
  4. Lucrum


    Spot on.
  5. Anybody with half a head and wealth will high tail it out of the US postehaste. Wealth destruction is occuring at an exponential rate and it it always wiser to be out of reach of the ax man. I would love to see the expat rates this year. The wealth is funneling to china and the europeans can't stop it either.