Businesses brace for tax hike

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What would you do if your business lost more than $1 billion in 18 months?

First, you and I would be fired. Your successor would then make the decisions -- but I doubt one of the decisions he would make is to send the bill to customers, demanding short payments in amounts too huge for some of them to pay without jeopardizing the health of their businesses.

This is exactly the news thousands of employers will get as they open their mail this week and see their new South Carolina unemployment insurance rate. This will cost small and large businesses thousands and even millions of dollars more for years to come. Could this come at any worse time?

Businesses that have had layoffs or separations during the past seven years should expect to see these massive increases, paying from $100 more per employee per year to up to a brutal $1,000 or more. But there is something that you can do.

IF YOU ARE ONE of the thousands of companies that has been forced to lay off workers -- therefore most likely to receive a large unemployment insurance rate increase for 2011 -- look up your state Senate and House members. Tell them that this increase at this time will hurt your ability to compete and will hurt your ability to hire workers back.

How did the state get here? For years, the South Carolina Employment Security Commission wrongly doled out unemployment insurance benefits to individuals whose reasons for termination did not merit state unemployment benefits. This included employees who had been fired for cause: intoxicated on the job, stealing, taking drugs, insubordination and other egregious acts. Consultants hired by Sen. Greg Ryberg's Senate Labor Committee estimated this cost to be 47 percent of the total unemployment fund wages paid out! Who was watching the farm?

WHILE THIS ABUSE was occurring, the economy collapsed and the unemployment insurance trust fund went from a positive balance of $300 million to a negative of $900 million. Now, because no one was minding the trust fund properly, businesses are expected to shoulder the entire burden of paying back this deficit. This is not right.

It is critically important that South Carolina begin paying off its debt to the federal government. It is equally important that the fund adequately cover unemployment benefit payouts each year. But it is the method and timing in which these increases are hitting South Carolina businesses that is wrong, and must and can be changed by your call.

South Carolina is still recovering from its worst economy in decades. Why should businesses alone have to bear the cost of a nearly $1 billion mistake? South Carolina businesses need help from our legislators. Instead we are getting tax-and-spend responses. If this worries you as it does me, I implore you to contact your state legislators today.

(The writer is president of MAU Workforce Solutions in Augusta, with four offices in South Carolina.)

Comments (21) Add comment
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Techfan
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Techfan 02/03/11 - 02:22 am
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According to most of the

According to most of the posters on this site, businesses don't pay taxes. They just pass it on to the consumer.

chascush
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chascush 02/03/11 - 11:47 am
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Techfan, ‘According to most

Techfan, ‘According to most of the posters on this site, businesses don't pay taxes. They just pass it on to the consumer.’
This tax will eventually be passed on to the consumer. Guess what, unlike the guvamint a business has to make a profit to stay in business. In a lot of cases the tax can not be passed on so they GO OUT OF BUSINESS AND EVERYBODY LOSES THEIR JOB.
But I don’t expect most libs to understand that because most are like the community organizer and have never run any kind of business.

dichotomy
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dichotomy 02/03/11 - 08:29 am
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Yeh, until the price becomes

Yeh, until the price becomes so high that the consumer quits buying the goods or services. Then the business goes out of business. In order to try to hold the costs down, the business will first quit hiring and possibly reduce the number of employees. I know you like to use the Democrat tactic of diverting the argument Techfan but you still can't change the facts or the logic. The consumer eventually pays all taxes. Even though the business passes them on to the consumer, the taxes can get high enough to where the consumer quits buying the product. At that point the business starts laying off people or goes out of business. Higher unemployment insurance will certainly retard hiring. That is the salient point Techfan. Your little "gotcha" comments are irrelevant to the discussion. I'll bet you are a fan of Congressman Weiner.

faithson
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faithson 02/03/11 - 10:03 am
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These new increases will

These new increases will produce a more responsible employer. The more you hire people who in the end get fired, the more you pay in unemployment. I remember well as a contractor my state unemployment rate increasing relative to how many people I 'put in the street' because they did not work out. I became much more intrusive during the intake. Mr. Hatcher does make a good point about reasons for dismissal, but in all cases there is a 'hearing' to determine the eligibility at which the employer can make his case. If the case against the claimant by the employer does not meet muster, eligibility is granted. If Mr. Hatcher can come up with a better system it behooves him to bring it to the attention of S.C. legislators. The reason for the out of control costs is the magnitude of the unemployment dilemma we find ourselves in.

Chillen
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Chillen 02/03/11 - 10:59 am
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techfan, in this case the

techfan, in this case the cost will be passed on to the employee - businesses run on small profit margins - they can't absorb this expense.

As I posted on a different, but related article. Entitlements come with a price. A big one.

When people are paid for 2 years to literally sit on their butts & do nothing, someone has to pay for it. Now the piper has come calling and those of you lucky enough to still be working will now pay for your fallen commrades. Enjoy.

WW1949
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WW1949 02/03/11 - 10:40 am
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That is the way it is for all

That is the way it is for all the government "giveaway programs". To many takers that do not derserve it. Cut the benifits and make it where they will have to look for work instead of the handout. I have no problem with the person that is laid off for a force reduction but I have a big problem for the ones who are drinking, doing drugs, stealing and the like getting benifits. South Carolina and the rest of the nation should also.

chascush
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chascush 02/03/11 - 01:14 pm
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faithson, ‘I became much more

faithson, ‘I became much more intrusive during the intake.’
It will make businesses more leery of hiring.
Your statement ‘These new increases will produce a more responsible employer.’ is ridicules. You might have been a ‘contractor’ but my bet is you are out of business.

Chillen
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Chillen 02/03/11 - 02:04 pm
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faithson. As an employer,

faithson.

As an employer, I've only been on this side of an unemployment claim. In my experience the govt "official" who examines the case will side with the employee 99% of the time. They actually seem to "want" to give this money to them.

Second, here is a better solution. When you file for unemployment, the state should examine your employment history & records. If they find that $4457 has been filed over the last 10 years by you and by your employer for you then you can receive that much plus 4% interest annually. That's it. When the money you have contributed is gone, your benefits are gone.

It ridiculous that someone who has only contribued a few thousand to the unemployment pool can pull out $1500 per month for YEARS!

Another ponzi scheme. Just like social security.

mable8
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mable8 02/03/11 - 03:20 pm
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While I may agree that

While I may agree that unemployment rates are high and may cause an employer some financial difficulty, what employers may need to realize that out-sourcing American jobs to third-world countries in order to hire people at slave wages has added to this mix. Furthermore, employers--especially large corporations such as utility companies, have been realizing grand profits because they repeatedly request and receive service increases applied to the consumer. What essentially is occurring here is the corporate over-head is no longer a part of the corporate budget because consumers are being forced to pay that overhead expense. Yes, we want our businesses to succeed, but workers/consumers usually get the short end of the stick in the long run. So, how fair is fair?

stairway2nowhere
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stairway2nowhere 02/03/11 - 04:46 pm
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looks like the unemployment

looks like the unemployment rate once again is fixing to skyrocket

chascush
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chascush 02/03/11 - 06:45 pm
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mable8, ‘What essentially is

mable8, ‘What essentially is occurring here is the corporate over-head is no longer a part of the corporate budget because consumers are being forced to pay that overhead expense.’
It amazes me how liberals think. The corporate over-head HAS ALWAYS BEEN PAID BY THE CONSUMERS. Companies make a profit or they go out of business.
It is greedy old companies that are messing things up so why don’t we let the guvamint take them over and run them. With the community organizer in charge who has never run anything that should work real good.

Chillen
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Chillen 02/03/11 - 10:25 pm
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mable8 most employers in

mable8 most employers in America are small businesses and have not outsourced their jobs.

faithson
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faithson 02/04/11 - 12:08 am
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chascush, my bet is you sit

chascush, my bet is you sit in high places and look 'down'... makes for a skewed point of view. by the way, I have lived off 1099's for the last 32 years. I have experience with the ups and downs of labor, mandatory if entrepreneurship is your way of life.

KSL
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KSL 02/04/11 - 04:56 am
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We also have lived off

We also have lived off 1099's, just about the same amount of time, perhaps a little longer than you. We don't quite have the same viewpoint that you have developed.

judgeandjury
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judgeandjury 02/04/11 - 10:17 am
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It's sad to see legislators

It's sad to see legislators make decisions that can potentially snuff out the economic recovery. Insane tax increases! I thought SC was a Republican state?

Crime Reports and Rewards TV
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Crime Reports and Rewards TV 02/04/11 - 11:16 am
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When taxes go up, jobs go

When taxes go up, jobs go down. If you can't find a job or you can't grow your biz go see the tax man, he has your money. Governments own Billions in assets but won't sell them to allow jobs. Sometimes when businesses are formed, tax users put that business, out of business, then tax users blame it on everything except what they did which was put the taxpayers out of business in favor of the tax user clique. Actions have consequences.

Chillen
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Chillen 02/04/11 - 11:40 am
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judgeandjury - it's not

judgeandjury - it's not really up to the state of SC. The federal govt keeps extending the unemployment benefits & the states have to pay them. Because there are so many people on the unemployment "public dole" they must tax more for it. Blame the feds not the state.

Oh, but not to worry every one. The shiny new unemployment numbers came out today. The govt is telling us it is only 9%. Now, can they please tell us how many people dropped out of the work force and are no longer reported? How many people added to the welfare/food stamp roster? What is the under-employment #?

So many questions. So few answers from the commuity organizer and his commrades & minions.

chascush
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chascush 02/04/11 - 04:52 pm
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faithson, ‘chascush, my bet

faithson, ‘chascush, my bet is you sit in high places and look 'down'... makes for a skewed point of view.’
You would lose your bet. I’m just a poor conservative. I made my choices and I live with them. Some of my relatives and friends made a lot more $$ than me but I do not hold that against them.

usapatriot
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usapatriot 02/04/11 - 05:46 pm
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maybe that's why a note was

maybe that's why a note was stapled to my paycheck saying the company was going to suspend 401k matches.

seenitB4
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seenitB4 02/05/11 - 08:26 am
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chillen, I agree the bennies

chillen, I agree the bennies have a price & we are paying for it everyday.
but mable 8 has a point too....when we outsource 74,000 factories---over 8 million factory jobs, that is like a punch in the gut to our economy. When I call support services & they are ALWAYS in India-China-or etc. I say bye-bye to the company doing the outsourcing.....we can bring our economy back....that's the change I want to see.

seenitB4
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seenitB4 02/05/11 - 08:29 am
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Buy local---give your money

Buy local---give your money to local businesses---buy gift cert. at Christmas & birthdays from local stores-restaurants-flower shops----buy local produce as much as possible---serta has a plant in Grovetown, think about that when you need bedding---we can make a difference.

judgeandjury
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judgeandjury 02/05/11 - 01:03 pm
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Chillen, I agree the feds

Chillen, I agree the feds extending UI is a problem, but the Feds are paying the tab for all the extra weeks. (weeks 27 thru 99) The SC problem came from a large wave of people collecting the initial 26 weeks and depleting the fund. The first 26 weeks comes from taxes paid by employers. The SC (Aiken Senator Greg Ryberg chaired the committee) legislature made the decision to increases taxes last spring.

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