The Rich Get Poorer as Number of Millionaires Declines

Thursday, 18 Aug 2011 12:05 AM

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Recently released IRS figures show that the number of millionaires has declined 39 percent since 2007, leaving those millionaires who remain to continue paying the lion's share of taxes, The Wall Street Journal reports.

Figures for 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.

They also suggest that if Warren Buffet truly wants to reduce the deficit, encouraging policies that create more millionaires would be smarter than not campaigning to tax the remaining ones more.

Nearly four of 10 millionaires vanished in two years, and the total taxes they paid in 2009 declined to $178 billion, a drop of 42 percent.

Taxpayers making $1 million accounted for about 0.2 percent of all tax returns but paid 20.4 percent of income taxes in 2009. Those with adjusted gross income above $200,000 a year paid 50.1 percent of the $866 billion in total personal income taxes, despite the fact that they comprised just under 3 percent of tax filers.

This means the top 3 percent—the group President Barack Obama complains aren’t paying their fair share—paid more than the bottom 97 percent.

Moreover, the number of filers with $10 million or more in reported income fell to 8,274 from 18,394 in 2007, a 55 percent drop, resulting in a 51 percent drop in their tax payments.

USA Today reports that Obama has proposed ending loopholes and tax breaks for wealthier Americans as part of a deal to reduce the federal debt.

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