Monday, June 03, 2013

Taxing Unemployment Benefits Increaes Stress : No Jobs Avaliable

It seems money is harder and harder to come by to spend on stupid things deemed important to politicians, especially if those politicians have a vested interest in where that money goes. Taxing unemployment benefits is not necessarily a bad thing in that it might force the individual to look harder for employment, but when there aren't any jobs, what's the alternative?

After all, it's only been five years that our fearless leader has be "focused like a laser" on jobs, but the jobless rate hasn't moved, and the 6 trillion dollars that he has spent on making the 'economy' stronger to create jobs, General Motors Unions, big banks, solar panels and wind mills, money that he borrowed from future generations from the Chinese and others, hasn't worked other then provided funds for his reelection campaign and the Democrat party.

So with all this, where are the jobs? Where is the outrage from the media like they screamed when the unemployment rate of 4.6% went up to 5.4% when George Bush was president?

Trillions of dollars wasted for what? Who voted for this? Twice!

State Taxation of Unemployment Benefits
Source: Joseph Henchman and Chris Saddock, "State Taxation of Unemployment Benefits," Tax Foundation, May 13, 2013.
May 24, 2013

For the last five years the United States has been under considerable economic stress. The financial crisis has come down on Americans hard and it has become difficult for many people to find jobs. As a result, over 5 million Americans have had to apply for unemployment insurance (UI). As a joint federal-state program, UI benefits and taxes vary widely by state, say Joseph Henchman and Chris Saddock of the Tax Foundation.

State taxation of unemployment insurance income varies by state.
  • Out of the 41 states that tax personal wage income, only six exempt unemployment insurance income: California, Maryland, New Jersey, Oregon, Pennsylvania and Virginia.
  • Only two states partially tax UI income: Indiana and Wisconsin.
  • Indiana exempts 50 percent of the amount above $12,000 if the unemployed citizen in question is not married, and 50 percent of the amount above $18,000 if he or she is married.
  • Wisconsin also exempts 50 percent of the amount above $12,000 if the unemployed citizen in question is not married, and 50 percent of the amount above $18,000 if he or she is married.
  • The remaining states fully tax unemployment benefits.
UI income is income being used by the individual, so some would argue that it should be taxed that way, as minimizing differences between federal and state definitions of taxable income reduces compliance costs.

On the other hand, many of the individuals who are in need of UI are under a lot of financial stress, especially if they are married and have children to provide for in their household.
 

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