End the unemployment insurance tax

[jumptheshadow]

It's one of worst, most counterproductive taxes we've got: The unemployment insurance tax. It takes money away from many people who are struggling to keep a roof over their heads. Often, these folks are retraining or are facing long-term privation. They are willing and able to work but the jobs in their area have simply disappeared. There is no way that the government should be taking money out of their pockets. And especially not when the wealthy are getting tax cuts.

Many times, the long-termed unemployed are faced with a double whammy: They are forced to deplete their savings, and then they incur a tax bill when they become freelancers. It can take years for them to get out of debt and regain fiscal health. Again, the government shouldn't contribute to the problem by taxing the benefits they get when they are laid off.

I remember, when Clinton was running, a woman at one of his town hall meetings told him that she was paying taxes on her unemployment benefits. "I promise you that will change," Clinton said to her. (I am citing this from memory.) But it never happened.

I am happy to see that our candidates are focusing on a more equitable tax system. I would be much happier if they would recall that fairer time, before Reagan took office, when the IRS wasn't demanding its due from some of our most vulnerable citizens.

[slackmaster]

1. As one about to become unemployed I vehemently disagree

Since I have been paying the premiums I am entitled to collect the benefits until I find suitable work.

The last time I filed a claim was just over 10 years ago. Unemployment insurance benefits have saved my skin a few times.

What would you do, simply eliminate the program? It's certainly not a regressive tax because there is a cap on premiums and on benefits. If you qualify for the maximum benefit that's all you get no matter how much you made previously.

[Buffler]

2. Not what the poster was saying

You have to pay federal income taxes on your unemployment benefits. The poster is suggesting that this tax should be eliminated.

[jumptheshadow]

3. That's exactly what I was saying

Two decades ago, you didn't have to pay that tax.

Since then, there has been tremendous economic displacement in this country. A large percentage of the population has been unemployed at one time or another. And yet the government insists on taxing these vulnerable people.

It's not fair, and it's counterproductive.

As our candidates focus on the tax code I hope they will reconsider the unemployment benefits tax.

[slackmaster]

4. Thanks for the clarification

I agree, UI benefits should not be taxed. They should be treated like any other insurance payout.

[newyawker99]

11. Hi Buffler!!

Welcome to DU!! :toast:

[Hamlette]

5. you are not paying benefits

unemployment is 100% financed by employers. Employees do not contribute anything.

[Buffler]

6. Wrong

unemployment is 100% financed by employers. Employees do not contribute anything.

No, the employee pays it all. It is an expense the employer incurs to higher someone so the employee is paying for it through lower salary, reduced or nonexistent other benefits, and other ways.

[WhoCountsTheVotes]

9. no, incorrect

That's part of labor cost and it's paid by us, indirectly, through lower wages.

[PVnRT]

7. I'll second that

In addition, they don't take all the taxes out - so you might actually owe some come tax time, which is ridiculous. Why tax something that is itself paid for by taxes? Stupid.

[WhoCountsTheVotes]

8. Thank Reagan

what an ass - massive tax cuts for rich people, and raised taxes on the unemployed.

[DiverDave]

10. Which president started the UI tax?

I seem to recall raygun, I know he taxed tips for servers because, I think he said, That we were making SO MUCH MONEY!! that wasn't taxed.
I was a waiter at the time and remember paychecks printed with the amount of 0.00

Thanks alot you stinking repuke bastards, when you dont get a tip, it COSTS the server!

[M0rpheus]

12. As one who is unemployed for the 2nd time in 2 years.

Both from layoffs, and both for 6+ months, I would welcome a tax cut on my unemployment check (to 0%).

I was given the option of taking it out or not, and after looking at how much I would owe not taking it out I opted for it (like I really had a choice). It really steams me that after the child support they take taxes out leaving me with a grand total of $226.00 every 2 weeks (a 75% pay cut) x( to support my wife and 3 teens... We were barely scraping by on 2 saleries. That extra few dollars means a lot to us right now.

Our savings are tapped and there is little money for the small things. The only real saving grace here, is that I live in a family bldg so I have a place to live for free at the moment.

Can we fast forward to Nov? I feel the need to vote very badly. :evilgrin: