Available Soon: Request your printed copies of the Idaho Freedom Index mailed to you!
Request Your Copies
Note to Dustin: This is currently only visible to logged in users for testing.
Click Me!
video could not be found

HB 335 - Unemployment insurance rate reduction

HB 335 - Unemployment insurance rate reduction

by
Phil Haunschild
January 16, 2018

Bill description: This bill would lower the rate which employers pay into the unemployment insurance fund by .2 percent.

Rating: +3

Does it increase barriers to entry into the market? Conversely, does it remove barriers to entry into the market?

The unemployment insurance tax makes it more difficult for companies to hire new employees. This tax does so by forcing a company to pay anywhere from half of one percent of the salary up to a full six percent of the wages for each employee hired. For some, this means they hire fewer employees to compensate for the increased costs of each employee they have already hired.

This has the most detrimental effect on new businesses, due to the way Unemployment Insurance rates are calculated. In 2016, for example, these businesses were forced to put 1.5 percent of their total wages towards Unemployment Insurance, substantially higher than what most other employers were paying.

By lowering the total rate by .2 percent this bill would lower the barrier to hiring for all employers.

(+1)

Does it directly or indirectly create or increase any taxes, fees, or other assessments? Conversely, does it eliminate or reduce any taxes, fees, or other assessments?

The unemployment insurance rate is calculated for each employer based on the total wages they pay their employees. As stated above, this ranges from less than one-half percent to a full six percent depending on how frequently the employer’s employees receive unemployment insurance benefits.

This bill would save Idaho employers a total of $115 million over the next three years- money which could otherwise be put towards hiring new employees, increasing the wages of existing employees, or expanding their businesses.

(+1)

Does it increase government redistribution of wealth? Conversely, does it decrease government redistribution of wealth?

By reducing the total collections from the unemployment insurance tax, this bill would decrease the total amount of money going towards the state’s Workforce Development Training Fund. This program, which subsidizes training costs for big businesses, has been aptly described as a corporate welfare program. It takes tax dollars and subsidizes businesses at the expense of other Idahoans.

Especially problematic is the manner in which this program is funded by skimming off a portion of the unemployment insurance revenues. Employers are the ones paying this tax, meaning that the state is taking away from the resources of many businesses to subsidize a few others. This is something of Robin Hood in reverse: taking from the many to feed the few who are wealthy and well-connected.

Lowering the total unemployment insurance tax takings would decrease the funding for this redistributive program.

(+1)

 

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
COPYRIGHT © 2024 Idaho freedom Foundation
magnifiercrossmenucross-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram