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Indiana business owners get hammered with an aray of taxes that the public doesn’t take into consideration. One of them is unemployment taxes they have to pay. Indiana is still paying off the loan from federal government when the economy went south in 2008. Here is more from News-Sentinel.com:
“We have a surplus? That’s because employers are eating it,” said Black, controller of Nowak Supply Co., 302 W. Superior St., which in the past two years has paid $10,000 in federal tax surcharges because Indiana still has not repaid all of the $2.4 billion it borrowed from the federal government in 2008 when the recession wiped out the state’s unemployment compensation fund. Nowak, which paid more than $14,000 in state and federal unemployment taxes last year, expects to pay another federal unemployment tax surcharge this year in excess of the $6,000 it paid last year — a penalty shared by other employers throughout the state.
Then the recession hit and the account’s black ink turned into a raging river of red, which resulted in officials from Indiana and at lest 25 states to seek more than $47 billion in federal loans to keep unemployment benefits flowing. Indiana was supposed to have repaid its loan five years ago but still owes about $900 million, Frank said — debt that will be repaid in part by the penalties Nowak, Black and no doubt countless other business owners consider so unwise and unfair.
Unemployment taxes show that it makes businesses think about or actually hire less with its regressive taxation formula:
After all, if a company’s penalty is determined by the number of employees, isn’t that just one more incentive to keep the labor force as small as possible?