Employers Could Face Higher Taxes for Jobless Aid
Employers could face higher taxes in 2014 under an Obama administration budget proposal to States hit hard by the recession and weak recovery of their unemployment funds supplement and repay money borrowed from the federal government to help. The proposal would have the option of increasing tax revenue from business, changing their benefit or a combination of both. Companies would most likely be affected by the increase, but some economists say workers can also feel the change as companies pass on the costs of the tax to their employees through wage freezes or smaller wage increases.
The administration plan would increase the income subject to unemployment insurance taxes of $ 7,000 to $ 15,000. The federal tax is used for unemployment insurance would be halved, which means that the federal government should not see an increase in turnover of the modification. But states would be allowed to use the new income to collect more money from employers. Congress would have to approve the recommendation. Business organizations recoiled at the news of the proposal. The National Federation of Independent Business, which represents mostly small operators, said that postponing a possible tax increase to 2014 would still influence decisions that employers make now.