Thousands of Millionaires Collect Unemployment

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Posted 10/3/2012 by SuzastampinCTMH in NSBR Board
 

SuzastampinCTMH
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Posted: 10/3/2012 6:12:08 PM
I heard this on ABC news tonight and thought it would be a good topic for the Peas Should they or shouldn't they?

A new report shows that some 2,400 millionaires received unemployment insurance benefits during the economic downturn, a number that has caught the attention of politicians who funded extensions of benefits for up to 99 weeks as the economy crumbled.

In 2009, 2,362 millionaires received unemployment benefits, down from 2,840 the year prior, according to a study from the Congressional Research Service, a non-partisan arm of U.S. Congress that provides policy and legal analysis. Of the 2,362 more than 1,000 receiving unemployment benefits had a household adjusted gross income of $1.5 million in 2009.

The report titled "Receipt of Unemployment Insurance by Higher-Income Unemployed Workers" found that 0.02 percent of tax filers that received unemployment benefits in 2009 were millionaires. A total of $20.8 million in unemployment benefits went to this group.

"It sounds scandalous when you hear that millionaires are going to collect unemployment insurance," Bill Frenzel, guest scholar at the Brookings Institute and former Republican member of Congress, told ABC News. "On the other hand, millionaires get unemployed too and have made payments into the unemployment insurance."

In 2010, 4.6 million people were kept out of poverty due to unemployment benefits, according to the Center on the Budget and Policy Priorities.

Frenzel says if they made a million dollars in income the year prior, "they could probably stand being barred from unemployment this year."

And, apparently one member of Congress agrees.

"Sending millionaires unemployment checks is a case study in out-of-control spending. Providing welfare to the wealthy undermines the program for those who need it most while burdening future generations with senseless debt," Republican Senator Tom Coburn, M.D. of Oklahoma said in a statement to ABC News. Based on the report from the Senator's office, millionaires received $74 million in unemployment insurance from 2005 to 2009.

According to the Center on Budget and Policy Priorities, the average individual collects about $300 per week from unemployment compensation.

Early last year, Sen. Coburn introduced " Ending Unemployment to Jobless Millionaires Act of 2011," which is currently languishing in the House of Representatives, a bill which sought to halt payment of federal funds for unemployment compensation to individuals whose "resources in the preceding year" was $1 million or more.

But millionaires aren't the only individuals to benefit from unemployment benefits. A few other high-income brackets receive compensation from the government. More than 8,000 tax filers making $500,000 to $1,000,000 received unemployment benefit income in 2009 and more than 900,000 tax filers that made $100,000 to $500,000 received unemployment benefit income.

Source



Kelli/Mom
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Posted: 10/3/2012 7:21:00 PM
I don't have a problem with it. Those millionaires have probably paid way more into the federal/state/local coffers than they would be taking out while receiving unemployment benefits.

Even if they are "millionaires," they would still have mortgages, utilities, food expenses, and so forth. The unemployment benefit would most likely be less than what they were bringing home in a paycheck, and many could still find themselves in dire straights.

Being a "millionaire" also doesn't mean ready access to cash. The "resources from the preceding year" could be tied up in a house that is impossible to sell, industrial equipment, or numerous other sources that are not fluid.

I don't know how the government could scrutinize every person entitled to unemployment and decide which ones have cash money in the bank, which ones have property that could be sold to support themselves, and which ones have relatives willing to take care of them. Perhaps the best thing is to provide the "insurance" to people who have paid their "premiums" without trying to determine who is worthy. Could you imagine if a homeowner's insurance policy looked at assets before paying a claim?

o-pea-one
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Posted: 10/3/2012 7:23:47 PM
I think they should, it is an insurance policy, they paid into it. You pay for it, it is there to mitigate risk.


Heather



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Posted: 10/3/2012 7:26:05 PM

I don't have a problem with it. Those millionaires have probably paid way more into the federal/state/local coffers than they would be taking out while receiving unemployment benefits.

That's one rationalization, but it only works if individuals pay into the fund. In some states, only the employer pays into the fund.


-----------------------------------------
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Free~Bird
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Posted: 10/3/2012 7:27:07 PM

"It sounds scandalous when you hear that millionaires are going to collect unemployment insurance," Bill Frenzel, guest scholar at the Brookings Institute and former Republican member of Congress, told ABC News. "On the other hand, millionaires get unemployed too and have made payments into the unemployment insurance."


This.
They have equal rights to what they paid into.


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Posted: 10/3/2012 7:34:45 PM

"It sounds scandalous when you hear that millionaires are going to collect unemployment insurance," Bill Frenzel, guest scholar at the Brookings Institute and former Republican member of Congress, told ABC News. "On the other hand, millionaires get unemployed too and have made payments into the unemployment insurance."


This.
They have equal rights to what they paid into.


Another one that agrees with this. As much as the premise seems incongruent, this program is for every American citizen.


Well Peas, I believe this thread has gone Thrusday.
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moveablefeast
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Posted: 10/3/2012 7:54:06 PM

Even if they are "millionaires," they would still have mortgages, utilities, food expenses, and so forth. The unemployment benefit would most likely be less than what they were bringing home in a paycheck, and many could still find themselves in dire straights.

Being a "millionaire" also doesn't mean ready access to cash. The "resources from the preceding year" could be tied up in a house that is impossible to sell, industrial equipment, or numerous other sources that are not fluid.


Yup.

It's not uncommon for a company CEO to be paid a relatively small salary, but be compensated in non-cash vehicles such as stock. You could look at total compensation and think a CEO made millions of dollars, when the actual cash income may have been in the hundreds of thousands.

While I am not usually terribly sympathetic to the terrible financial plight of America's millionaires, que pobrecitos, I think that unemployment benefits should be available to those with a qualifying job loss, and not restricted based on income. When you're unemployed, your income is zero. (I do think unemployment should be restricted for a period of time where there is a severance package or exit bonus.)

clee321
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Posted: 10/3/2012 7:57:21 PM

(I do think unemployment should be restricted for a period of time where there is a severance package or exit bonus.)


It used to be, did this change?



moveablefeast
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Posted: 10/3/2012 8:06:16 PM
clee - it may vary state by state. In California in the 2000s many of my colleagues who were laid off alongside me were eligible for unemployment immediately because they were paid "retention bonuses" as opposed to "severance". Some of those retention bonuses were very large.

redayh
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Posted: 10/3/2012 8:13:22 PM
I dont' think distinctions like that should be made. If you are eligible, to me, it shouldn't matter what your original salary was. Being a millionaire does not necessarily mean you have millions of dollars at your disposal.

TXDancermom
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Posted: 10/3/2012 8:18:25 PM
another one who does not have a problem with it. they earned the right to claim it if they lost their job.


mapchic
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Posted: 10/3/2012 8:25:37 PM

As much as the premise seems incongruent, this program is for every American citizen.
This.

I can't stand the position that some have that because they are wealthy the rich are somehow to be treated differently - either better or worse - than other citizens.




"When someone asks you 'think about what Jesus would do', remember that a valid option is to freak out and turn over tables" -- Unknown

“I am a Roman Catholic - the one true faith, (the Microsoft of Christianity) and I know Roman Catholicism is the one true faith because Roman Catholicism tells me it’s the one true faith... And if you remember from earlier in this sentence Roman Catholicism is the one true faith – so how could it be wrong?” ~ Stephen Colbert ‘The Word’ 11-28-06

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BrinaG
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Posted: 10/3/2012 8:58:29 PM

Frenzel says if they made a million dollars in income the year prior, "they could probably stand being barred from unemployment this year."



Not sure who Frenzel is, but he doesn't seem to understand the definition of the word millionaire. Well, looking back, he is a former senator, but he is still confused. A millionaire is a person with a million dollar in assets, not necessarily a person who earned a million dollars a year. Having a million dollars in assets does not mean you have enough liquid cash to pay your mortgage, your bills, your kids college, etc.

Regardless of your salary, you pay into unemployment insurance. Are they going to stop charging millionaires this tax or are they planning to make unemployment into yet another form of welfare?

SuzastampinCTMH
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Posted: 10/3/2012 9:29:15 PM
I'm not sure about other states, but in NY the employee does not pay any unemployment insurance. The cost of unemployment insurance is born solely by the employer. The more claims against unemployment, the more the employer pays in unemployment insurance premiums.

I'm not sure how I feel about this completely. As an employer that has no where near a million in assets, I'm not sure how I would feel if an employee worth way more than we do was collecting unemployment causing our premiums to rise.

I have to say, with our country's finances in the crapper, I am a bit surprised not to see some disdain from the peas for the 99 weeks extension.



Kelli/Mom
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Posted: 10/3/2012 9:46:54 PM


That's one rationalization, but it only works if individuals pay into the fund. In some states, only the employer pays into the fund.

This is true, but the employer pays unemployment insurance taxes on behalf of the employee and as a percentage of the employee's earnings (to a certain annual cap).

I also don't see unemployment funds as existing in a vacuum. Even if the money flowing into an unemployment fund never mingled with other budgets, the other taxes paid--income (federal and state in some places), payroll (social security and medicare), property, sales, capital gains, vehicle and gas taxes--keep the wheels of government spinning. The "millionaires" have been paying to keep those wheels turning, and should be entitled to collect benefits if their own personal wheels fall off.

mapchic
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Posted: 10/3/2012 10:09:06 PM

That's one rationalization, but it only works if individuals pay into the fund. In some states, only the employer pays into the fund.
As an employer that is part of my cost fore each employee. If I didn't have to pay into that fund the employee would get that money directly. The money paid into the fund is paid on behalf of the employee.




"When someone asks you 'think about what Jesus would do', remember that a valid option is to freak out and turn over tables" -- Unknown

“I am a Roman Catholic - the one true faith, (the Microsoft of Christianity) and I know Roman Catholicism is the one true faith because Roman Catholicism tells me it’s the one true faith... And if you remember from earlier in this sentence Roman Catholicism is the one true faith – so how could it be wrong?” ~ Stephen Colbert ‘The Word’ 11-28-06

Vocatus atque non vocatus, Deus aderit

anorviel
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Posted: 10/3/2012 10:12:55 PM
I don't have a problem with it - they paid into it. Moreover, 2400 millionaires is a drop in the bucket when we're talking about the number of people collecting unemployment. I would rather the money and time spent in congress fighting against a small fraction of perceived un-deserving people collecting unemployment was spent on a larger issue.

Ann

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Posted: 10/4/2012 12:21:06 PM
A million dollars really isn't that much anymore. And I day this as someone who is no where near being one.

Also, they paid into it so why should they not get it.
If they didn't qualify for it then they shouldn't be required to pay in to it


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Posted: 10/4/2012 12:34:16 PM
they paid into it, they should get it.

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Posted: 10/4/2012 12:41:03 PM
Yep - it's insurance. They should be able to collect like others.



busypea
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Posted: 10/4/2012 12:56:22 PM
Zero problem with this.


A million dollars really isn't that much anymore. And I day this as someone who is no where near being one.

They used the word "millionaire" incorrectly. These are not people who have assets of a million or more - and that, I would agree, is not really that much in this day and age. The people being discussed in the article are those who had annual *income* of $1,000,000 or more. And that, by pretty much any standard, is a lot of money. Regardless of income, if one is eligible for unemployment, I don't think there is any issue with them collecting it.
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