Obama targets $1 million earners: Vero ranks 51
STORY BY MILTON R. BENJAMIN, (Week of September 22, 2011)
With President Obama proposing a new minimum tax on people whose taxable income is $1 million or more annually, Forbes magazine reports that the Vero Beach barrier island is one of 64 places in the United States where the average income in the highest income range tops $1 million.
For 32963 taxpayers displaying $200,000 or more on their 2008 federal income tax return, the most recent year for which data is available, the average adjusted gross income for all beachside high-bracket returns was $1.06 million, according to IRS data obtained by Forbes writer William Baldwin.
Ranked by income, this puts the Vero barrier island 51st nationally among the 64 highest income communities, far behind the leader, the wealthy enclave of Fisher Island off Miami, where the average adjusted gross income was $3.23 million.
In Florida, the average income of Vero’s high-bracket taxpayers also trailed their brethren in Boca Grande on Florida’s west coast ($1.65 million), the Palm Beach island ($1.54 million), Boca Raton ($1.45 million), Key Largo, home of the Ocean Reef Club ($1.31 million), Jupiter ($1.28 million), Naples ($1.21 million), and Sarasota’s Longboat Key ($1.09 million).
ZIP Code 32963 ranks higher, Forbes reported, when it comes to estimated net worth. High-bracket Vero taxpayers as of September had an average net worth of $11.7 million, the magazine calculated, placing it 40th nationally. This figure excludes short-term bank deposits, home equity and retirement accounts.
In Florida, the average net worth of 32963 high-bracket taxpayers trailed those of Fisher Island ($57.2 million), Palm Beach ($23.3 million), Boca Raton ($21.2 million), Key Largo ($17.9 million), Naples ($16 million), Jupiter Island ($14.7 million) and Longboat Key ($11.9 million).
The barrier island’s taxpayers moved up further in Forbes’ rankings when it came to size of charitable contributions as a percentage of income.
Vero high-income taxpayers on average reported charitable donations of 3.6 percent of adjusted gross income, placing 32963 givers 20th nationally. In Florida, Vero beachside charitable donations trailed those in Palm Beach, Naples, Longboat Key, Key Largo and Miami’s Bay Harbor Islands.
The highest average donation as a percentage of income in any community was the 5.9 percent reported for Medina, Wash., a figure undoubtedly helped considerably by the philanthropy of Bill Gates.
In compiling this list, Forbes said it went to a little-utilized IRS database that sorts tax returns by income range and by ZIP Code. Wary of releasing any data that might reveal something about individual taxpayers, the IRS slices its statistics into broad ranges. In this data set, the top tier of income is $200,000 and up.
Forbes said it then zeroed in on communities where the average income within the $200,000-and-up set was at least $1 million. Result: a set of 130,400 tax returns from 64 communities.
The magazine reported that just under half of the income reported in these 130,400 high-end returns came from working: salaries, pensions, Social Security, IRA payouts. The upper-bracket taxpayers took in 52 percent of their income from property: stocks, bonds, real estate, oil wells and businesses.
For the average American taxpayer, property income is only 17 percent of the income reported.
This list, by focusing on high-bracket families, differs considerably from lists published elsewhere, which tend to compute the average income for all taxpayers in each ZIP Code. This list includes only ZIP Codes where at least 100 tax returns displayed income of $200,000 or more. In a number of cases such as Naples, the list combined several adjoining ZIP Codes.
The list also excludes communities that did not have at least three homes listed for sale at $5 million or more.