Obama Wants To Double Unemployment Taxes

The expansion of unemployment benefits has amassed billions of dollars for the states which don’t have the revenues to pay for those benefits. Now states are being forced to look at raising taxes to pay for this new debt – indeed in many states the law requires the tax increases once the unemployment debt reaches a certain level – but Obama wants to put off the tax increases until 2014…at which point he wants to double them.

WASHINGTON (AP) — The Obama administration is proposing short-term relief to states saddled with unemployment insurance debt, coupled with a delayed increase in the income level used to tax employers for the aid to the jobless.

The administration plans to include the proposal in its budget plan next week. The plan was described late Monday by a person familiar with the discussions on the condition of anonymity because the budget plan is still being completed.

Rising unemployment has placed such a burden on states that 30 of them owe the federal government $42 billion in money borrowed to meet their unemployment insurance obligations. Three states already have had to raise taxes to begin paying back the money they owe. More than 20 other states likely would have to raise taxes to cover their unemployment insurance debts. Under federal law, such tax increases are automatic once the money owed reaches a certain level.

Under the proposal, the administration would impose a moratorium in 2011 and 2012 on state tax increases and on state interest payments on the debt.

In 2014, however, the administration proposes to increase the taxable income level for unemployment insurance from $7,000 to $15,000.

Under the proposal, the federal unemployment insurance rate would be adjusted so that the new higher income level would not result in a federal tax increase, the person familiar with the plan said.

States, however, could retain their current rates, meaning employers could face higher unemployment insurance taxes beginning in 2014

In other words, the expansion of unemployment benefits has created a huge amount of debt for the states. Obama wants to pay that debt off later, with big tax increases on employers, rather than now.

All of which illustrates the lunacy of expanding unemployment benefits in order to help rescue the economy. Democrats talk of these expanded benefits as though they were helping the unemployed, but in reality the benefits are paid for by employers. You know, the people we want to be hiring.

In order to expand benefits payments to the unemployed (who we want to be working), we’ve created a huge amount of debt to be paid off by taxes on employers (who we want to be hiring the unemployed).

Put another way, we’re making it easier to be unemployed and harder to hire.

Hope for change.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • tarpon

    Obama want’s a lot of stupid things.

  • http://flamemeister.com flamemeister

    “Obama Wants To Double Unemployment Taxes” I’m sure he does, it’s part of the very heart of the Liberal program.

  • http://sayanythingblog.com Mountainmouth

    I thought he was going to make job creation his top priority.
    More taxes on business to pay for unemployment –
    This guy is brilliant, by Dumbocrat standards.

  • Bat One

    Let’s see… the states are being required to pay back the money they were forced to borrow from the federal government to meet the mandates imposed by the federal government. Sounds to me like just another federal Ponzi scheme to gain control over the states.

    • $8194357

      woop there it is..

  • awfulorv

    A thought occurred to me just now. Has any one seen less lately? No, I mean it, I’ve not seen less used in, I don’t know how long. Is less even part of our lexicon anymore? Further, why not just drop it from our vocabulary, as we seem to have dropped it from our use.

  • camsaure

    Heaven forbid that the states actually try to remedy restrictions and obstructions on free enterprise that cause unemployment in the first place. More insanity.

  • SigFan

    Pretty good sleight of hand on this one. Obama and the feds force the states to extend UC to ridiculous lengths, borrow money from the feds to cover it and then mandate the states trigger automatic state tax hikes to pay it back. So Obama and the Dems get to look like heroes while the states are made to look like goats when they are forced to raise taxes to pay it back. And defer it to 2014, when Obama knows that in all likelihood he’ll be out of office, or God forbid entering his two-year lame-duck period. What a schmuck.

    • Bat One

      The obvious answer is for states to opt-out or “nullify” the federal unemployment insurance mandate and implement their own system at the state level. For that matter, if a state decided not to offer any unemployment insurance at all, why not? Seems to me that decision should be left to the voters in the separate states, and not some Grand Pooh-Bah in Washington.

      • SigFan

        Oh, you anarchist you! Imagine that, the states actually making their own decisions based on what is best for and shown to be desired by the voters in their own states. What’s next, a call for the states and the feds to abide by the constitution?

        Great idea Bat – one that would be most sensible and fair, and for that reason alone one that the left would fight tooth and nail.

  • Spartacus

    There seems to be a pattern with Obama. Anything he wants that is unpopular is to be passed now and implemented after he’s been voted out. That way, in his mind, it’s not his fault. Just as up until now and for the next couple of years everything unpopular has been Bushes fault.

  • Jamermorrow

    It is unemployment benefits that keep people unemployed. Most on unemployment don’t actually want a job. Leisure has value and if you are not working you have plenty of leisure time. Unemployment is $1600 a month in ND. Why work in a job that pays you $2000 a month. It would not be worth the time and effort for $400 a month. In fact after taxes and the cost of getting to and from work I would probably need about $3000 a month to get a job. Unemployment benefits encourage people not to work.

    • http://Sayanythingblog.com The Whistler

      I don’t disagree with your premise, but I do want to point out that ND has the lowest unemployment rate in the country.

      • Jamermorrow

        I should have pointed out that ND has the most stringent requirements for unemployment. A max time period of three months and proof of applying for jobs and going to interviews. I just used ND as an example but the model applies anywhere.

        • http://Sayanythingblog.com The Whistler

          Now that’s interesting. I’ve never known how ND compares with other states.
          Must be one of the reasons why we have less slackers than Minnesota.

    • catinca

      I have worked for 45 years in various professional lines and was making eight times the amount you are referring to as being the unemployment benefit in ND. I was one of six people downsized from my job. Never did I think in a million years that at age 67 I would find myself in this mess. If you think it is easy to find a job making anywhere close to the six figues I was making in these circumstances, let me know and I will move to ND. Furthermore, the amount I get per week is a paltry sum and has left me without recourse. There is an old Indian adage which says, “Don’t judge a man unless you have walked in his mocassins.”

      • Jamermorrow

        Your situation is unique. Hopefully you still can understand the problem I pointed out. One thing I can say is that we had an artificial boom created by debt fueled consumption that caused a lot of salaries to get inflated. Once the bubble burst many salary’s had to readjust back down to sustainable levels. These bubbles are part of the business cycle created by the Federal reserve. During the boom everybody is happy because wages are going up. Once people realize that it was not economic growth but an increase in debt the market comes back down and causes lots of pain. If the government would get out of the way the economy would start recovering and you would get a job.

        • robert108

          “…we had an artificial boom created by debt fueled consumption that caused a lot of salaries to get inflated.”

          Nope. The bubble in the real estate market was caused by a false demand signal in that market, which was the result of the Dems mandating bad housing loans to increase home ownership. This inflated the value of housing, thus attracting investment money that should have gone elsewhere.
          govt interference in a market=bubble

          • Jamermorrow

            It was not only the dems. Low interest rates without legitimate savings led to the problem. These low interest rates were created by Greenspan and promoted by Bush. It was not just in housing. In fact the American consumer is going to be a thing of the past as soon as interest rates go back up. This is going to cause a lot of pain.

  • http://Sayanythingblog.com The Whistler

    I think they should tax Congressmen and Politicians for the culpability in creating this unemployment mess to pay for the unemployment.

  • $8194357

    What the feds water with taxes grows, does it not? Subsidise unemployment and illegals and guess what…More illegals and unemployment..Worked with welfare and many other programs..Tried and true marxist deconstruction methods used against a “free market capitolist” culture…Big brother decides what grows and what dies..

  • 2hotel9

    Slapping higher taxes on the people actually working. Yea, THAT will spur an increase in employment!

  • mickey_moussaoui

    BO…good for the hood’

  • $8194357

    Where he gets his ideolgy and political views from…….

    October 12, 2010 4:00 A.M.
    Obama’s Radical Past
    And his connection to socialism isn’t all ancient history, either.

    On the afternoon of April 1, 1983, Barack Obama, then a senior at Columbia University, made his way into the Great Hall of Manhattan’s Cooper Union to attend a “Socialist Scholars Conference.” There Obama discovered his vocation as a community organizer, as well as a political program to guide him throughout his life.

    The conference itself was not a secret, but it held a secret, for it was there that a demoralized and frustrated socialist movement largely set aside strategies of nationalization and turned increasingly to local organizing as a way around the Reagan presidency — and its own spotty reputation. In the early 1980s, America’s socialists discovered what Saul Alinsky had always known: “Community organizing” is a euphemism behind which advocates of a radical vision of America could advance their cause without the bothersome label “socialist” drawing adverse attention to their efforts.
    A loose accusation of his being a socialist has trailed Obama for years, but without real evidence that he saw himself as part of this radical tradition. But the evidence exists, if not in plain sight then in the archives — for example, the archived files of the Democratic Socialists of America (DSA), which include Obama’s name on a conference registration list. That, along with some misleading admissions in the president’s memoir, Dreams from My Father, makes it clear that Obama attended the 1983 and 1984 Socialist Scholars conferences, and quite possibly the 1985 conclave as well. A detailed account of these conferences (along with many other events from Obama’s radical past) and the evidence for Obama’s attendance at them can be found in my new book, Radical-in-Chief: Barack Obama and the Untold Story of American Socialism.

    The 1983 Cooper Union Conference, billed as a tribute to Marx, was precisely when Obama discovered his vocation for community organizing. Obama’s account of his turn to community organizing doesn’t add up. He portrays it as a mere impulse based on little actual knowledge. But that impulse saw Obama through two years of failed job searches. Clearly he had a deeper motivation. The evidence suggests he found it at the Socialist Scholars conferences, where he encountered the entrancing double idea that America could be transformed by a kind of undercover socialism, and that African Americans would be the key figures in advancing community organizing.

    The 1983 conference took place in the shadow of Harold Washington’s first race for mayor of Chicago. Washington was not only Obama’s political idol, he was the darling of America’s socialists in the mid-1980s. Washington assembled a “rainbow” coalition of blacks, Hispanics, and left-leaning whites to overturn the power of Chicago’s centrist Democratic machine. Washington worked eagerly and openly with Chicago’s small but influential contingent of socialists, many of whom brought the community organizations and labor unions they led onto the Washington bandwagon.

    America’s socialists saw the Harold Washington campaign as a model for their ultimate goal of pushing the Democrats to the left by polarizing the country along class lines. This socialist “realignment” strategy envisioned driving business interests out of a newly radicalized Democratic party. The loss was to be more than made up for through a newly energized coalition of poor and minority voters, led by minority politicians on the model of Harold Washington. The new coalitions would draw on the open or quiet direction of socialist community organizers, from whose ranks new Harold Washingtons would emerge. Groups like ACORN and Project Vote would swell the Democrats with poor and minority voters and, with the country divided by class, socialism would emerge as the natural ideology of the have-nots.

    Figures pushing this broader strategy at the 1983 Socialist Scholars Conference included ACORN adviser Frances Fox Piven and organizing theorist Peter Dreier, now a professor at Occidental College and an adviser to Obama’s 2008 presidential campaign. That is to say, Obama’s connection to socialist ideologues didn’t end with his recruitment into the ranks of community organizers. It began there and blossomed into a quarter century of intricate relationships with both on-the-record and in-all-but-name socialists. I’ve spent the last two years in the archives unraveling the connections. Here are a few.
    By the mid-1980s, James Cone, Jeremiah Wright’s theological mentor, had struck up a close cooperative relationship with the DSA. Cone and a prominent follower spoke at the conferences Obama attended. Shortly after the 1984 conference, Cone joined Reverend Wright in Cuba, where they expressed support for the Cuban social system as a model for the United States. Wright touted his Cuba trips to his congregation for years. Obama would have quickly discovered Wright’s ties to the liberation theologians he’d first learned of at the Socialist Scholars conferences. The connection helps explain Obama’s choice of Wright as his pastor.
    A little-known Chicago training institute for community organizers, the Midwest Academy, is in many ways the key to Barack Obama’s political rise. The Midwest Academy was closely allied to the DSA, which sponsored the Socialist Scholars conferences in New York. Most Midwest Academy leaders remained quiet about their socialism. Inspired by the success of the American Communist “Popular Front,” and by 19th-century American reformers who used populist and communitarian language to achieve socialist ends through incremental legislative means, the Midwest Academy’s leaders advocated a strategy of stealth.

    In the ’70s and ’80s, theory was put into action in a series of “populist” coalitions quietly controlled by the socialist leadership of the Midwest Academy and the DSA. The Citizen/Labor Energy Coalition, for example, fought a series of legislative battles against oil and gas companies. Its signature proposal was its call for a public energy corporation to “compete” with private companies.

    Officials from the Midwest Academy network trained Obama, supplied him with funds, and got him appointed head of Illinois Project Vote. Years later, Obama sent foundation money to the Midwest Academy. Barack and Michelle Obama ran a project called “Public Allies” that was effectively an extension of the Midwest Academy. Alice Palmer, the Illinois state senator who chose Obama as her successor, was once a high official in the Midwest Academy network. Several Midwest Academy leaders advised Obama’s 2008 presidential campaign. Academy founder Heather Booth is now a key figure in coordinating grassroots support for the president’s budget, health-care, and financial-reform plans.

    The leaders of the Midwest Academy were eager to avoid public exposure of their socialism. Yet they trusted Obama enough to put him on the board of their satellite organization, Chicago Public Allies, and to succeed one of their own as state senator.

    As I detail at length in Radical-in-Chief, deceptions and glaring omissions about his radical past reach far beyond Obama’s involvement with the Socialist Scholars conferences and the Midwest Academy. Archival documents reveal that Obama lied during the 2008 campaign about his ties to ACORN. New evidence confirms that Obama has hidden the truth about his relationships to Jeremiah Wright and Bill Ayers. The unknown story of Obama’s deep involvement with a radical group called UNO of Chicago is revealed. The claims of candidate Obama and his mentors that he shunned Saul Alinsky’s confrontational tactics turn out to be a sugary fairy tale. The obfuscating techniques of Obama’s memoir, Dreams from My Father, are exposed.

    The pattern of misdirection upon which President Obama’s political career has been built has its roots in the socialist background of community organizing. ACORN, Reverend Wright, and Bill Ayers were all routes into that hidden socialist world, and that is why Obama has had to obscure the truth about these and other elements of his past. More important, the president’s socialist past is still very much alive in the governing philosophy and long-term political strategy of the Obama administration.
    As we move into the first national election of the Obama presidency, Americans are confronted with a fateful choice. Either we will continue to be subject to President Obama’s radical and only very partially revealed plans for our future, or we will place a strong check on the president’s ambitions. Knowing the truth about Obama’s past is the best way to safeguard our future.

    — Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center and author of Radical-in-Chief: Barack Obama and the Untold Story of American Socialism.

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