Massive Hike in Unemployment Taxes Slams Businesses
Get ready for a jump in unemployment:
Employers are getting hit with a massive tax hike at a time when they can least afford it.Companies in at least 35 states will have to fork over more in unemployment insurance taxes this year, according to the National Association of State Workforce Agencies.
The median increase will be 27.5%. And employers in places such as Hawaii and Florida could see levies skyrocket more than ten-fold.
Many of these hikes happened automatically as prolonged joblessness triggered state laws governing their unemployment insurance systems. But at least seven states voted to raise their taxable wage bases, the level of income subject to unemployment tax. And another 10 are looking at upping the wage bases or tax rates.
When you raise the cost of employing workers, do you think businesses will employ more of them, or fewer? The answer is obvious, right? Well, not for lawmakers:
When lawmakers [in Florida] approved an increase in unemployment taxes a year ago, they didn’t realize what the impact would be, said Rep. Dave Murzin, who heads the state’s Economic Development & Community Affairs Policy Council. The state’s unemployment rate was 7.6% at the end of 2008, versus 11.8% in December.
If there is a rule with no exceptions, it’s the law of unintended consequences of government decisions. Especially when the people making the decisions are as dim as those Florida lawmakers.
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