Obama Proposes Boosting Unemployment Tax

Companies would pay more to insure workers
By Kevin Spak,  Newser Staff
Posted Feb 8, 2011 9:21 AM CST
Obama Proposes Boosting Unemployment Tax
An unemployed man looks for work at JobTrain employment office in Menlo Park, Calif., Tuesday, July 20, 2010.   (AP Photo/Paul Sakuma)

President Obama’s proposed budget is expected to call for the first increase in unemployment taxes since 1983. Employers would, as of 2014, have to pay taxes on $15,000-worth of wages, up from the current $7,000, the Wall Street Journal reports. The move would give states a way to refill their ravaged unemployment-insurance funds that would be more politically palatable than raising taxes.

The proposal would soften the blow by lowering the federal unemployment insurance rate, so that the federal government won’t make any money on the switch, one source said. But the Journal still expects the move to shatter Obama's fragile detente with business leaders, and to meet stiff opposition from Republicans. (Read more 2012 budget stories.)

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