Easy Come, Easy Go: A Millionaire is a Sometime Thing

Once you become a millionaire, you’ve got it made, right? Not so fast.  The Tax Foundation, using 10 years of IRS data, found that the number of taxpayers reporting income of $1 million or more varies a lot from year-to-year and (no surprise) fluctuations in the number of millionaires corresponds to the business cycle. Between 2007 and 2009, for example, the number of millionaire tax returns fell from 392,200 to 236,883, a drop of 40%.

Not only that, but half of millionaire tax returns are never repeated, probably because they stem from one-time events, such as a stock or business sale. Only 6% of the millionaires filing returns in 2001 were still millionaires in 2009 (See Chart).

The millionaire data is part of the Tax Foundation’s new book of charts called Putting a Face on America’s Tax Returns.   The book also includes charts on income inequality, taxpayers’ ages and marital status, the income and education gap, changes in business structure and income, and other demographic and economic indicators based on data from the IRS, the Census, and the Congressional Budget Office, among other sources.