American millionaires are lining up in droves to apply for unemployment benefits.
Thousands of American households with incomes exceeding $1 million per year are still comfortably receiving unemployment benefits from the government.
According to data from the US Internal Revenue Service (IRS), cited by Bloomberg, during the worst period of the recent economic downturn, the government paid out approximately $80 million in unemployment benefits to households with total incomes exceeding $1 million per year. In 2010 alone, unemployment benefit payments to this group reached a record high of $29.9 million.
Americans line up to apply for unemployment benefits.
These 3,200 households, earning more than $1 million annually, 20% of which are from New York, received an average unemployment benefit of $12,600 per household in 2010. This is the latest data provided by the IRS.
The $80 million is equivalent to less than 0.01% of the projected $845 billion budget deficit for the U.S. government this year. However, unemployment benefits for millionaires highlight the shortcomings of some federal assistance programs. This data also shows the difficulties in curbing spending.
"Too many people are taking advantage of government support, to the point that others are wondering why they aren't doing the same," commented George Walper Jr., president of Spectrem Group, a Chicago-based market research and consulting firm.
To date, US lawmakers have made numerous efforts to eliminate or limit the benefits enjoyed by the wealthy. For example, in December 2011, the US House of Representatives passed a law that would tax 100% of unemployment benefits for individuals applying for benefits with total income exceeding $1 million per year, or for married couples applying for benefits with total income exceeding $2 million.
According to statistics, among the American millionaire households receiving unemployment benefits in 2010, 610 were from New York State, accounting for 20%.
These numbers seem understandable, given the city
Unemployment insurance was created in the United States in 1935 as part of the Social Security Act. This policy allows states to tax employers' payrolls to fund unemployment benefits. Weekly benefits vary by state. Unemployed individuals can receive up to $405 per week in some states.
In 2010, each millionaire household in New York received $13,590 in unemployment benefits for the entire year, compared to $8,050 for the national average household.
Across the United States, unemployment benefit payments rose to $94 billion in fiscal year 2012, approximately three times the $33 billion paid in 2007. Payments peaked at $150 billion in 2010.
Gary Burtless, a senior fellow at the Brookings Institute in Washington, said that millionaires receiving unemployment benefits accounted for only about 0.035% of the 9.2 million Americans who received such benefits in September 2010. This group also represented just over 1% of the 280,360 millionaires in the U.S. last year.
According to Dan Tri-M
