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Unemployment Checks for Millionaires?

More than 11 million Americans received unemployment checks in 2009.  And 2,362 of them were millionaires.

It’s true.  According to a recent report from the Congressional Research Service, in 2009, nearly 2,400 Americans living in households with annual incomes over $1 million got unemployment checks.  In all, those 2,400 got a total of $20.8 million in jobless benefits.

The government is giving millions to millionaires?  It might sound absurd, but it’s the law.  As it stands today, the Labor Department requires states to pay out unemployment regardless of individual or household income.  Last year, several bills were introduced in Congress that would either tax or restrict jobless benefits to high income households.

But we need to keep this in perspective.  Millionaires received a tiny sliver of total unemployment benefits paid out in 2009…just .02%.  That year the government spent $83 billion on jobless claims, and 98% of that money went to households with incomes under $200,000.

Cutting jobless benefits to millionaires would end up saving the federal government some money…but not much.  And that small amount of savings would have to be matched up against the administrative cost of cutting millionaires out of unemployment insurance… those potential costs could easily outweigh the potential savings.

And where would the line be drawn?  Who is too wealthy?  In 2009, over 120,000 Americans from households with $200,000 to $500,000 in income got jobless checks, at a cost of over $1 billion.

And while it might sound ‘unfair’ to give welfare to the wealthy, is it ‘fair’ to take it away?

The 2,362 millionaires who got an unemployment check paid for that benefit when they paid their taxes.  If it’s not fair to give them the jobless benefits they technically paid for, then maybe it shouldn’t be fair to let them collect the social security benefits they also paid for.

It’s not the dollar amount of jobless benefits paid to millionaires that matters.  That’s a drop in the bucket.  It’s the question of the ‘fairness’ of taking something from taxpayers who have contributed to the system.

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