Indiana House of Representatives taking lessons from California
Posted by Mike Sylvester - 2/15/09 @ 7:26 pm - Filed Under Featured, Local Politics
As most of you know the state of California is in dire financial trouble. They have consistently had massive annual budget deficits (Similar to our Federal Government) and they have raised taxes and fees to the point that many businesses have fled California.
Indiana realistically has a business climate that is middle of the road as far as the taxes and fees businesses have to pay.
That being said the Indiana Unemployment Fund is in dire shape. I 100% oppose the Unemployment Insurance program as it exists in the United States. I feel that it is unfair to tax businesses so that employees who lose their jobs can be paid unemployment benefits. I feel that if an employee wants unemployment insurance they should go to a private insurance company and purchase their own insurance.
Unfortunately, our Government is involved in the Unemployment Insurance program and forces employers to pay into a government fund and a government bureaucracy that in turn doles that money back out to workers.
As our system stands employees pay absolutely nothing for unemployment insurance; it is 100% paid for by businesses.
The Indiana Unemployment Fund spent 407 million dollars more in unemployment benefits than it took in last year.
Currently each employer pays a tax to the state of Indiana on the first $7000 in wages they pay each of their employees. Each company starts out by paying 2.7% of the first $7000 in wages to the Indiana unemployment program; they also pay .8% to the Federal unemployment program (Which in turn subsidizes the various state unemployment programs). So last year in Indiana a new Company paid $189 per employee into the Indiana unemployment fund and they paid $56 into the Federal unemployment fund for every employee they paid $7000 or more in wages in 2008. If they paid the employee less than $7000 in wages they paid in a pro-rated amount.
Each year the Indiana Department of Workforce Development monitors how often each company’s employees make unemployment claims and each year they can change each Company’s rate. The more often your employees claim unemployment benefits the higher rate you pay. Last year the most an Indiana employer paid was 5.6% of the first $7000 in wages. This equates to $392 per worker.
Obviously the more the State Legislature forces Indiana employers to pay in taxes the more likely Indiana employers are to lay off more workers and the less likely they are to create new jobs.
By a vote of 9 to 3 the idiots in the Indiana House labor committee voted to increase the taxes paid by Indiana employers into the Indiana unemployment fund. The proposal increases the maximum rate to 8.2% and increases the wage base to the first $9000 in wages. This means an Indiana employer who pays in at the maximum rate will have to pay in $738 rather than $392. This almost doubles the amount these employers will be taxed by the Indiana Department of Workforce Development.
Even worse this massive tax increase will not even fix the problem. According to the Indiana Department of Workforce Development this increase would raise an additional $260 million a year if it were in place for the entire year. Please remember that the Indiana Unemployment fund paid out $407 million more in benefits in 2008 than it received in revenue. And unemployment is on the rise.
The Indiana Unemployment system does need to be revised; however, we need to tighten the eligibility rules and decrease benefits. I could agree with a small tax increase if it were coupled with tightening of eligibility requirements, a shorter time period benefits are received, and/or lowering the amount of benefits received.
Good Grief.
Mike Sylvester
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4 Responses to “Indiana House of Representatives taking lessons from California”
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Your analysis is excellent. I love your - rather extreme - proposed remedy. Let individuals buy their own unemployment insurance. I don’t think the average employee realizes how much he is probably losing in income to taxes and benefits his/her employer actually pays on his/her benefit. Of course, I don’t even think he/she realizes how much he/she is even paying in income and other taxes. The government counts on the collective ignorance of the masses of tax obligations.
The Government tax paying citizens are paying for 45% of the non public producers! And tax-payers pay for the all of the Government paid salaries, health insurance and life long pensions we can no longer afford.
What happened to PAYGO.
[...] This is my second post concerning the structural deficit the Indiana Unemployment Fund is facing. You can view part one of this post here. [...]
bOBBETT ON fEB. 17.2009
Agree with last comment I read. Way past time for our House to get off its butts, stop worrying about GLOBAL people they’re still supporting & PUT AMERICANS to WORK instead of STILL laying off millions of Americans so formerly-American companies can continue paying “slave wages” to GLOBAL help, WHILE DOING A JOB on America at the same time. WAY BEYOND time for ELECTED to continue padding their salaries, which they’ve done since they HANDED our living-wage paychecks to overseas companies who have banked most of it for themselves while paying “slave wages to their people. OUR ELECTED care about Americans? Yeah, right! Most of them in office have been thre way too long & should NOT be re-elected. TOO many have become RICH while spouting off they give a ‘HOOT’(?) about the American people, who continue to be WITHOUT dedent living wages.
NEW(?) Admn. no better—Has a leader(?) who has fought (paid $2 million bucks to 3 law firms to hide his citizenship)against showing his TRUE citizenship to Americans (still paying them). HAS ONE American parent. Was supported by a group (fellow politicians)aware he was campaigning with these 3 law firms sealing his true citizenship from America, while allowing him to go against our Constitution, laws, etc. then and still are. Really true Americans.
Just what has this new party done for America? More and more taxes, want Socialized Medicine, control of private industries, NO JOBS yet, and they’ve been in for a year. Their best action is spending Treasury (bankrupt)on millionaires & Big BIZ; passing credit card legislation with “holes in it” so cred. cd. companies received millions in American bucks & Americans are still being legally felonized by same banks charging usurious fees of EVERY KIND (without getting their hands slapped). .
THINK BEST THING THAT SHOULD BE DONE IS TO DO:
COMPLETE AUDITS OF EVERY/ANY MONEY ACCOUNT & ALL PEOPLE IN EVERY POSITION IN ALL FACETS OF OUR GOVERNMENT. FEDERAL, STATES, LOCAL, TOP to BOTTOM.
Way past time for WE THE PEOPLE to really know everything going on and WHAT has gone on. At least, we could put many, many auding firms to work - everywhere. Maybe we’d PROFIT much in TRUTH & money (from the many FINES we know would be made from what would be UNCOVERED.
What do YOU think?
Arleine
P. S.
Sorry for previous acciental entry.. I love my country, fed up with NONSENSE going on in it. WANT A WONDERFUL AMERICA for my grandchildren & your grandhildren & all AMERICA. Time to FORCE this bunch to be AMERICAN for AMERICANS. FED up with treatment of our military, our kids, you, me, all Americans. WANT NO AMNESTY for ILLEGALS, NO Socialized medicine,NO Communist anything for America. I like us AMERICAN!