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  • How Unemployment Taxes and Obama's Stimulus Are Killing Jobs

    The Associated Press reports:

    Employers already are squeezed by tight credit, rising health care costs, wary consumers and a higher minimum wage. Now, the surging jobless rate is imposing another cost. It’s forcing higher state taxes on companies to pay for unemployment insurance claims.

    Some employers say the extra costs make them less likely to hire. That could be a worrisome sign for the economic recovery, because small businesses create about 60 percent of new jobs.

    Sam Schlosser, owner of Plymouth Foundry Inc. in Plymouth, Ind., said his unemployment tax bill could double next year. Revenue at the family-owned company, which makes iron castings for machine parts, has fallen about 50 percent, he said. In case of higher taxes, his company may have to consider layoffs, he said.

    President Obama’s failed stimulus only compounds this problem. The New York Times Jay Goltz explains:

    A lot of people — including a lot of business owners — don’t understand how this works. Because the government cuts the unemployment check, it is widely assumed that it’s the government that pays the unemployment benefits. In reality, those benefits are funded by employer taxes. And here’s the killer: The more unemployment benefits your former employees collect, the higher your taxes go.

    It works like insurance. If the government pays a claim, your rates go up. In fact, if your former employee collects $10,000 in unemployment payments, you can expect to pay close to twice that in increased premiums. At least that’s how it works in my state, Illinois.

    Thus, this becomes another cost of doing business that smart owners attempt to control. How do you control it? By making as few hires as possible, by making sure that those hires you do make are as strong as possible, and by combining documented rules with good management.

    And now, thanks to the stimulus package, unemployment insurance has been extended as much as an additional 20 weeks. If you’ve had to lay off 10 people, this could easily result in additional taxes of $10,000, $50,000, or even $100,000. It’s a time bomb that won’t go off until after employers get their contribution-rate increase in November, but it will go off.

    And therein lies the final irony: Even after the economy improves, I’m going to think long and hard before I hire anyone. Thanks to the stimulus package — the stimulus package — the costs, paperwork, and legal exposure associated with hiring employees is on the rise.

    Posted in Economics [slideshow_deploy]

    15 Responses to How Unemployment Taxes and Obama's Stimulus Are Killing Jobs

    1. Freedom of Speech, T says:

      The ironic thing is that the perpetrators of this economic and fiscal crime against the American Taxpayers will be long gone by the time the REAL IMPACT is realized.

      They will be multi-millionaires with nice fat pensions, and secure both in home and person.

      Many will undoubtedly become lobbyists and further fatten their personal fortunes. All of those government contacts DO come in handy, don’t they?

      The worst thing is that they will blame everyone but themselves for destroying the opportunity for millions.

    2. Bob B. Zion, IL says:

      I thought "freedom of speech" was talking about the idiots on congress who continue to pass laws that make it so expensive and onerous to hire people that business owners would rather pay overtime than bring in enough workers to do the job.

    3. Freedom of Speech #2 says:

      Its big corporations and companies that caused this mess by off shoring all of the good jobs!!!

      Its the top dozen management that make millions a year at the expence of the little guy and the middle class. Also millions used for contributions to lobbyist groups and politicians and in there pockets. But they chose the other so now all they can do is hope to pull political favors to get what they want.

      Even 20 years after the fall of the Berlin wall. Communism is alive and well in this country. In another 20 years there will be no more middle class we will be like any other 3rd world country with rich and poor, no middle class. Thanks to the republicans and democrats, lobbyist, and cooperate America most jobs that were good middle class jobs are in Manila, Mumbai, Bangladesh all over the jobs for call centers, accounting, banking, medical records, taxes, for Americans goes over seas.

      At the same times the people who work for the government that over see this happening still have their early retirement, raises, pensions and healthcare. What are we going to have stop like cams and seat belt checks at evert corner to pay for goverment spending?

    4. Bobbie Jay says:

      Mr. Obama? Do yuu have a conscience? "will be good in the long term." for who!? Please read the founding documents and conduct your position accordingly. remove yourself and government positions that are in violation of the constitution, this will help all businesses and let the people do what needs to be done to live free and independently. t

      Strong people don't need your help to help each other. And wealth doesn't make a person strong.

      You know that, Mr. President? Don't you?

    5. TJS, Leesburg, FL says:

      "They will be multi-millionaires with nice fat pensions, and secure both in home and person."

      You are talking about employers. Apparently, they deserve to be rich, because they must assume the extreme risks and penalties imposed by our idiotic governments.

      What destroyed opportunities worldwide, was the mortgages-for-everybody program, the Fed's 1% interest rates which provided the backing for mindless risk, a government which wrote 40% of the risky mortgages, the SEC extending leverage to 40:1, and the CRA policies which extorted promises for $6 trillion in risky mortgages from the 4 biggest banks. And they're still doing the equivalent now with the FHA, which will soon pop, too.

      It's big government, working hard against us. Buying votes with your money and your grandchildren's future.

    6. Texas Conservative says:

      Rick Perry rejected the unemployment insurance funds in the stimulus package (the ones with strings attached), but Kay Bailey Hutchison, the RINO Senator who wants to be our governor, criticized him for that.

      She was wrong then, she is wrong now, and Perry needs to be re-elected on this issue alone. It is the tip of the iceberg with KBH. She is a big-spending liberal.

    7. Tim Az says:

      Lessons learned they don't come cheap. Just another example of the cruelty of liberalism and their methods of madness. Of course the liberals would say thoughs that are still working owe these higher unemployment insurance taxes. Because the employed are just too greedy in lifes lottery and would'nt take care of their fellow man any way.

      How's that hope and change working out for you?

    8. Slick says:

      The majority of our population always think that "the gov't HAS to do something" to help all those poor people that are out of work! And they always FORGET that the government is US and we will pay the bill for our elected officials "doing something."

      Perhaps this is EXACTLY why those of us who PAY the bills have been saying from the very beginning . . . . DO NOTHING! This, too, shall pass if we just leave the cycle to take care of itself!

      But here we are, in the middle of a swamp, with no boat, no life jacket, the alligators are circling and we burned up our last match because we couldn't stand to wait until dawn to know what time it was! If we had just sat down on the bank and done absolutely NOTHING, we would be well on our way out of this mess by now!!!

      Thank you to all the liberal Americans across America who think that the government is the answer to all of our problems!

    9. Freedom of Speech, T says:

      Dear Bob B. Zion, IL,

      Although members of congress have the power of the purse, there are many other political operatives and Perpetrators who have influenced congress to act on their behalf.

      These people care nothing for America. They are the real Un-Americans and there are many of them.

    10. Ben C, Ann Arbor says:

      The problem with taxes is that the consumers are the ones that foot the bill. I pass my tax increases to my customers and thus the inflationary economic death spiral resumes. I am amazed to think those in Congress assume business absorbs the taxes. But Obama has zero business experience so I am not suprized.

    11. Da Dog - Deep South says:

      Destroy Confidence

      Create Class Envy

      Create Confusion

      Manufacture Crisis

      Keep Everyone Off Balance

      Create Fear

      This is all a part of the "master plan". It is intentional. It is part of the illusion.

    12. Lynn B. DeSpain says:

      These times call for 'Truths, not Political Correctness'. Instead of Nationalized Healthcare, America needs 'Tort Control' in all areas of the Medical Fields. America needs to deport all Illegal Aliens! I've heard it said by many Politicians and other, that these people are honest and hard working and just looking to better themselves.

      Going by the very first statement, they are not "HONEST!" They broke the Law to enter our Nation. Shall each of us pick and choose which Laws to obey and which Laws to ignor, and expect our Politicians to order all Lawenforcement to leave us untouched, because the Laws we broke only were to entitle us to earn a better way of life for ourselves and our families, and other than those few Laws, we are, as a whole, Law abiding?

      I think not! It is either a Law or it is not. Either enforceable or not. If not enforceable, then as a Law it should be removed, but never removed because Politicians say so, only when the WILL OF THE PEOPLE SAY SO!

    13. Pingback: AntiObamaBlog.com » How Unemployment Taxes and Obama’s Stimulus Are Killing Jobs

    14. Rob Waterson says:

      Two words, please google them:

      Cloward Piven.

    15. lman says:

      Cross-blogged at http://www.repubx.com – first in news and home to IntelliFETCH Search .. check it out!

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