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Kathianne
11-22-2009, 04:39 PM
http://news.yahoo.com/s/ap/20091122/ap_on_bi_ge/us_unemployment_taxes


Rising unemployment taxes could hinder hiring

By CHRISTOPHER S. RUGABER, AP Economics Writer
Sun Nov 22, 1:20 pm ET

WASHINGTON – As if small businesses needed another reason not to hire, consider their latest financial burden: The cost of rising unemployment itself.

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....

bullypulpit
11-24-2009, 05:23 AM
So you're basically saying that a robust public option that any of us can sign on to is a good thing? I knew you'd come around. ;)

CSM
11-24-2009, 07:40 AM
So you're basically saying that a robust public option that any of us can sign on to is a good thing? I knew you'd come around. ;)

Wow...that's a stretch even for you! Sounds to me like what is being said is that taxes are killing small businesses. Your "public option" will be the coup de grace.

Insein
11-24-2009, 09:45 AM
So you're basically saying that a robust public option that any of us can sign on to is a good thing? I knew you'd come around. ;)

Of course because the crux of the article is that taxes are killing small business. So surely the solution is to throw a mountain of unsustainable spending on top of it. Clearly this will not add to the tax problem. :rolleyes:

Bully you are usually smarter than this.