Slip Sliding Away

Or why the Obama jobs initiatives will all fail. It’s the taxes:

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.

The states are scrambling to restore their unemployment insurance trust funds, which cover claims.

The state coffers are empty. The Federal coffers are having to print or borrow money to keep spending at Obama’s levels.

This will not end well.

This kind of tax hit on employers will guarantee more layoffs rather than more hiring. The much-touted tax credit for hiring new employees will be eaten alive by these increases – making it financial suicide for employers to bite on the proffered poison apple. The Obama “largess” will be eaten up by the new levies by the states and the employers will certainly be hit with additional future tax increases to pay back the money Obama glad-handed to them.

It’s a lose-lose-lose scenario for potential employers.

Tell me again why the GOP should sit down with Obama for more White House photo ops.

Bad time to play with the bums when a throw the bums out election is shaping up. Deservedly so.

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2 Responses to Slip Sliding Away

  1. crosspatch says:

    It is worse if a company had to lay off workers recently and tries to hire again. They pay a “penalty” rate, often for several years. The unemployment compensation premiums act as a deterrent to hiring.

  2. Mockingbird says:

    It’s really sad. Where’s Milton Friedman when we need him most.

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