How many Ky. households would be affected by taxes going up on half-millionaires? 5,859

11/27/2012 05:20 PM

First Warren Buffett and now U.S. Rep. John Yarmuth of Louisville has suggested that the tax cuts should expire for those earning $500,000 a year or more.

That’s higher than the $250,000 threshold President Barack Obama has suggested as the cutoff between the “middle class,” whom he says shouldn’t see tax increases, and those who should. The tax cuts approved during President George W. Bush’s administration are set to expire at the end of the year.

But many have argued that a $250,000 income for a family of four in expensive metropolitan areas like New York, Boston or Los Angeles is middle class and that a half-million is a more accurate marker for the wealthy.

In Kentucky, the $500,000 threshold would affect the top .32 percent — about one-third of one percent of households, according to 2010 tax filings with the IRS. In the region, only West Virginia has a smaller share of half-millionaires with a quarter of one percent bringing home more than $500,000, according to the Pure Politics analysis of IRS data. Meanwhile, Illinois had the highest share with about two-thirds of percent of the households earning more than a half-million dollars a year.

The IRS doesn’t itemize earners at the $250,000 mark. But it does categorize those who earn more than $200,000 a year.

Here’s how Kentucky rates to most of its surrounding states:
……………. households earning more than $200k ……… % of filers
Kentucky ………….. 33,062 ………………………………… 1.78%
West Virginia …….. 11,433 ……………………………….. 1.46%
Indiana ……………. 54,847 ………………………………… 1.84%
Ohio ………………. 107,837 ………………………………… 1.98%
Tennessee ………… 59,815 ………………………………… 2.10%
Missouri …………… 60,475 …………………………………. 2.25%
Illinois …………….. 200,337 ………………………………… 3.31%

And here’s how Kentucky compares to its neighbors when it comes to the percentage of millionaires it has among its tax filers:

Kentucky had 1,673 tax filers whose 990s in 2010 showed them bringing in more than $1 million. That’s not quite one-tenth of one percent. Again, only West Virginia has a smaller share with .07% (seven one-hundreths of a percent) — or 553 filers — earning more than $1 million in 2010, according to the IRS data.

About Ryan Alessi

Ryan Alessi joined cn|2 in May 2010 as senior managing editor and host of Pure Politics. He is now pursuing an advanced degree in non-fiction writing from Murray State University and is a regular contributor to Pure Politics. Ryan has covered politics for more than 14 years, including seven years as a reporter for the Lexington Herald-Leader. Ryan can be reached at purepolitics@twcable.com or @mycn2 on Twitter.

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