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Tuesday, October 5, 2010

While Millions Ponder When Congress will Extend Unemployment, 3000 Millionaires Receive Benefits

While up to 30 million Americans wait to find out if unemployment benefits will be extended for jobless under and beyond 99 weeks to take care of basic household necessaries; close to 3000 millionaires received the same benefits, whom were not within a state of financial parietal if they received the supplement income payments or not.
According to U.S. Internal Revenue Service data in 2008, 2,799 households reporting at least $1 million in income on their tax returns that year also, collected a total of $18.5 million dollars in jobless aid. This happen to include another 793 taxpayers with incomes over $2 million dollars in income and 17 with incomes in excess of $10 million dollars. All together, multimillionaires households reporting unemployment compensation to the IRS in 2008, received a grand total of  $9.8 million in jobless benefits.
In comparison, millionaires make up a small amount of the 3 million taxpayers in 2008, who reported receiving $15.7 billion dollar from unemployment compensation. This number was up from 2.6 million recipients reporting $11.6 billion in benefits for 2007, in total. 
Economists are surprised to find the number of people, with seven-figure incomes and plus income, whom still claimed benefits.
Interesting enough, in addition to the millionaires, another 7,011 households reporting income between $500,000 and $1 million in 2008, claimed jobless benefits totaling $51.8 million, the IRS data details.
“It’s a larger number than I would have expected,” said Alan Viard, resident scholar at the American Enterprise Institute, a Washington research organization to Bloomberg. “But, people at any income level can lose their jobs.”
The first 26 weeks of unemployment benefits are paid by states, with the current additional extensions, up to 99 weeks, being paid by the Federal Government. Unemployment compensation insurance benefits averages about $300 per week, on a national basis. 
Also, since unemployment benefits are insurance, funded with taxes paid by employers, the program not like need-based like welfare. Payments received is a taxable resource of income, similar to employer paid wages. In just, a millionaire who loses his or her job is entitled to benefits the same as a laid-off factory, office or restaurant worker.
It is key to understand that unemployment compensation is an insurance fund that the employer pays into over the time which an employee works with an company. Similar to other types of insurance, when a loss (tort) claim occurs - an employee loses a job though no fault of their own - the monies paid into the fund is reimbursed to the laid off employee.
“Getting an insurance payment doesn’t depend on need but only on suffering an insured loss,” said Roberton Williams, a senior fellow and expert on tax policy at the Urban Institute, another Washington policy research organization to Bloomberg. “We don’t say that your homeowners’insurance policy shouldn’t pay off if you’re a millionaire.”
Since 2008, the federal government has extended jobless benefits beyond the 26 weeks that states pay, due to both the economic downturn in the nation and increasing unemployment numbers - growing from 6 percent in August 2008 to the near double digits, at 9.6 percent, currently
The last Federal based extension for jobless under 99 weeks of supplemental income payments, Unemployment Compensation Act of 2010, H.R.-4213,  is scheduled to expire on November 30. The extension previously lapsed completely in June and was renewed on July 22, following a battle in Congress, in which some lawmakers believed it was time wind down the aid. 
A majority of Republicans  in the Senate, filibustered up to three attempts to extend the aid to those under 99 weeks, with claiming that the benefits should not financed with deficits. 
On September 30, Senator George LeMeiux (R-FL) blocked an attempt for an up or down vote to a group of up to 5 million unemployed job seekers called the 99ers, to receive extended payments from S-3706 -The Americans Want to Work Act, sponsored by Debbie Stabenow (D-MI). 
The bill, which is back in the Senate Finance Committee, would have added 20 additional weeks of payments and provided businesses with a $2000 tax credit to hire the longest-term unemployed. 
Congress in voted to exempt the first $2,400 of jobless benefits from federal income taxes within America Recovery and Investment Act of 2009, stimulus. Despite the jobless payments for middle and lower class Americans, the U.S. Census Bureau reported in August, that country’s poverty rate rose to 14.3 percent in 2009, the highest level in 15 years.
Ironically in 2007, the millionaires whom collected jobless benefits were low enough, that the IRS initially refused to publish the data, for fear their identities could be detected in violation of confidentiality laws. Still in the 2006 tax year, nearly 886 households reporting more than $1 million in income claimed jobless benefits, including 15 with incomes above $10 million.
No IRS data is currently available for the 2009 tax year.
Williams states that in some cases where millionaires claim benefits, the recipient may not be in a high-salary job. For example, a chief executive’s spouse may lose a teaching job.
“The teacher may not need the money, but collecting the benefits is different from a laid-off CEO collecting,” he said to Bloomberg.
Still, Williams believes the numbers remind him of stories he heard earlier in his career about movie actors who collected unemployment benefits between pictures.
“These were people comparable to your millionaires who clearly didn’t need the money but collected it nonetheless,” he said.

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