American Millionaires Go Missing

July 31, 2012

Free Market Foundation

In 2007, 390,000 US 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 per cent. 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 per cent, says the Wall Street Journal.

Those with $10 million or more in reported income fell to 8,274 from 18,394 in 2007, a 55 per cent drop. As a result, their tax payments tanked by 51 per cent.

These disappearing millionaires go a long way toward explaining why federal tax revenues have sunk to 15 per cent of gross domestic product (GDP) in recent years.

The loss of millionaires accounts for at least $130 billion of the higher federal budget deficit in 2009.

But the millionaires who are left still pay a mountain of tax.

Those who make $1 million accounted for about 0.2 per cent of all tax returns but paid 20.4 per cent of income taxes in 2009.

Those with adjusted gross income above $200,000 a year were just under 3 per cent of tax filers but paid 50.1 per cent of the $866 billion in total personal income taxes.

Before the recession, the $200,000 income group paid 54.5 per cent of the income tax.

This means the top 3 per cent paid more than the bottom 97 per cent, yet the 3 per cent are the people that President Obama claims don’t pay their fair share.

Source: Millionaires Go Missing, Wall Street Journal, August 17, 2011.

For text: http://online.wsj.com/article/SB10001424053111903480904576512501087811480.html?mod=googlenews_wsj

For more on Tax and Spending Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=25

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 30 August 2011