Rising unemployment taxes could hinder hiring

AP ^ | 1:20 pm EST, Sunday November 22, 2009 | Christopher S. Rugaber,

[BenLurkin]

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. Other employers say they'll cut or freeze pay.

-- Chuck Ferrar, who owns a liquor store in Annapolis, Md., expects to pay $9,000 in unemployment taxes next year, up from $3,000 this year. Health care costs for his employees will rise by $8,000, or 17.5 percent. "When you start adding this up, it turns into real money," he said. "If I lose an employee through attrition, I will not replace him. You can't afford to do it."

-- 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.

-- Marjorie Feldman-Wood, president of Al's Beverages in East Windsor, Conn., which makes soda fountain syrup, said higher taxes would make pay raises less likely. Connecticut is borrowing from the federal government, and employers fear the state will have to raise taxes soon to repay the loan. "There's only so much money at the end of the day," she said.

Bruce Meyer, a University of Chicago economics professor, said his studies show that higher unemployment taxes usually lead to lower pay for employees.

[BenLurkin]

Obama-nation

[rbg81]

Another sign that taxes are reaching a tipping point.

[Deagle]

Wow...you think that the rising taxes will kill employment - nah, just ask the Democrats. Can’t be true, they pledge more employment by raising taxes and hiring more government enforcers...so employment will go up..heh.

Mercy... I’m so depressed by this government’s actions that I really can’t say much more than what it is - STUPID (for more words - Don’t need to be banned)! I will be lucky if my son has a future, much less his kids...

Very depressed but active in eliminating these Democrats in office...!!

[FromLori]

Related

A) Minnesota’s unemployment insurance fund remains in a deficit

http://minnesota.publicradio.org/display/web/2009/11/19/unemployment-insurance-fund/

B) Mass. Unemployment Fund Running Out Of Money

http://www.wbur.org/2009/11/20/unemployment-trust-fund

C) Georgia unemployment fund is tapped out

http://jacksonville.com/news/georgia/2009-11-22/story/georgia_unemployment_fund_is_tapped_out

D) High unemployment depletes fund (Florida)

http://www.myfoxtampabay.com/dpp/news/state/1118-unemployment-tax

E) Gov. Phil Bredesen says another tax hike to shore up Tennessee’s unemployment trust fund appears unavoidable.

http://www.whnt.com/news/sns-ap-tn—unemploymentfund,0,604969.story

F) Montana

http://www.greatfallstribune.com/article/20091119/BUSINESS/911190305/Employers+face+jump+in+jobless+insurance+cost

22) GRAND RAPIDS OPINION
http://www.mlive.com/opinion/grand-rapids/index.ssf/2009/11/dissent_citys_fiscal_crisis_mu.html

ACDC Highway To Hell Lyrics

http://www.youtube.com/watch?v=DixnDjsEta0

[RobRoy]

I especially like your last link. :)

[LostInBayport]

That last link you included was inspired...I laughed out loud when I saw it! Thanks for the Mass. article...I did not know about it. I found this clip interesting:

Massachusetts will also increase the unemployment insurance tax rate that businesses pay. “The average per-employee cost in 2009 has been $583 and it is scheduled to go up to $835 per employee,” Bump said. That’s an increase of more than 40 percent during one of the worst recessions.

California, here we come! Note the socialist response by our mini-Bama governor:

Patrick said his administration is working with businesses to soften the blow. “But they also understand that all of us collectively as a matter of values have a responsibility for people who are out of work right now,” he said. “We want to be as responsible and as humane as can be.”

[Deagle]

Come on Folks! If you can’t get your dander up over this...what can you protest against? Is there no Congressional action that is against the Constitution that you will lay down and except?

Damn folks!...we are in a revolution of our own making (thank goodness), when will you realize the the time is now...!

[Attention Surplus Disorder]

Why would this matter? Aren’t all these folks in business to make sure they have good government and to make sure they provide for good government through their efforts, their capital, and their labor? Let’s ask Nancy Pelosi and Harry Reid, shall we?

[Myrddin]

The RATS raise minimum wage and extend unemployment benefits. It's not surprising that people are laid off due to increased labor costs and less motivated to seek new employment with a productive mailbox. The rising costs on employers will put more people on the street. It is self perpetuating stupidity.

[Salvation]

Looks like Obama has boxed himself into a corner.

(Bumper sticker --

[RobRoy]

Oh, I am taking action. I’ve oulined a lot of it on FR. I put my money where my mouth is. I have actually gone Galt. The only action I can take right now is to starve the beast, which is what I am doing. And what I don’t spend I am putting now in silver.

[Deagle]

Well, that does sound like the go along to get along method - unfortunately, we will be broke (Our glorious Country) before you’re 70...

[Deagle]

Damn... good for you - I am doing the same! If only more would be willing to forgo the nicities, we could make a real difference! Keep up the good fight...

[Frantzie]

LOL! I cracked up when I saw it too! Highway to Hell! LOL!

[headstamp 2]

Government destroying jobs? Whodathunkit.

[headstamp 2]

The ObamaCare crap sandwich will be the cou de gras for these businesses. You will also have businesses with no employees or “contractors” instead. The rest will close or move offshore.

The Democrats will utterly destroy small to medium size businesses in this country.

[Secret Agent Man]

They know this and they hope that it will hinder hiring.

[jwparkerjr]

Florida is raising their premiums. I’ve not see the details other than an announcement that those who were paying about $8 in premiums last year will be paying just over $100 this next year. Don’t know if that’s per person, per week or just what it represents. The press has been very weak in presenting the story.

[jwparkerjr]

LOL! But after the initial laughing you realize how sad it is that it’s the truth!

[BenLurkin]

http://www.youtube.com/watch?v=ZxnBSb4OKeU