I just completed a blog on a statement by Harry Reid that million-dollar-earners are primarily hedge fund managers and wealthy lawyers. Businesses owned by millionaires that create jobs are as rare as unicorns.
I decided to fact check this bizarre statement (which National Public radio appeared to support) myself. My results will be posted on my Forbes Econworld blog shortly. I use this note to list my data sources:
Data on tax filers earning one million dollars or more is from IRS’s Table 1.4 “Sources of income, adjustments, and tax size of adjusted gross income, 2009.” Table 4 gives the total number of million-dollar tax filers, their sources of income. Income from businesses is over $220 billion. The number of millionaire tax filers is 237,000, and they pay an average tax rate of 30 percent.
Data on employment in investment banking is from the Bureau of Labor Statistics study of investment banking in 2006.
Data on the number of investment bankers earning million-dollar-plus bonuses is from Morgan Stanley. I apply their ratio of employees making million dollar plus bonuses to investment bank employment in general to approximate the total.
Data on the number of general corporate counsels earning a million dollars or more (77) is from Law.Com.
Data on the number of equity partners in law firms earning total compensation of a million or more is from American Lawyer.com. I deliberately overestimate the number of million-dollar lawyers (14,000) by counting all equity partners in firms averaging million dollar compensation as earning a million or more.
My fact check shows how bizarre Harry Reid’s numbers are.