Unemployment taxes could break small biz

March 2, 2009
I read your article [on unemployment insurance in the Feb. 23 issue]. About three to four years ago, my unemployment tax was 0.1 percent. Now it's 1.1 percent. And it will probably go up.

Part of the reason for the deficit is:

There are a lot of illegal workers whose employers don't pay any taxes on [them]. Now they may not collect unemployment, but the fact that they're displacing workers where taxes would be paid causes part of this shortfall.

Another problem is that "referees" and "judges" allow benefits to employees that have been fired for cause and should not be allowed to collect the benefits. About 10 years ago we had a painter that was Hispanic (legal). We caught him sleeping in his van on a job site during work hours. The Hispanic referee bent over backwards to award him benefits. The only good thing that came out of that was it encouraged me to have an employee handbook drawn up. That has saved me in at least two other unemployment cases.

Of course a lot of employers don't protest the payment of benefits to employees, even when they were fired with good reason. And how many of those drawing unemployment benefits are actually working, as a handyman, under the table for cash, etc., and still drawing?

When you have any type of government handout, even though it's the business that's being taxed to pay it, there is bound to be inefficiency and perhaps corruption involved, whether by the government or by the employee.

Raising the taxes to 5 percent-6 percent for a company like mine would be devastating, even though I have few employees. I mean, after paying the state portion, we still have to pay into the Federal Unemployment Tax Act. I'm sorry the media is fueling this recession and that all the "rich" people are bringing the stock market down, but it's small business like mine, and EvaLee's Diner and Cento's Shoes that make up this country. And when Big Government gets what they want, which is nothing but Big Business, then we are truly doomed.


Jim Siener
President, James F. Siener Inc.
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