An increased direct tax on wages paid by Virginia employers resulting from the McDonnell Administration’s failure to repay loans that kept the state unemployment insurance benefit programs solvent hasn’t hurt jobs. But it does raise questions about how many other obligations have been ignored to “balance” the budget.
First he raided the Virginia Retirement System. Then he tried to sell off the ABC stores, the only reliable source of revenue for transportation funding. He pretended to find unaccounted for funds in the Department of Transportation, used them as a bridge to fund maintenance then quietly refunded the reserves. Now we find out that Federal Unemployment Trust Fund loans have gone unpaid. What other shell games are being conducted? Is Bob a flimflam man?
So ironic that this is an unemployment tax; Virginia is now a “credit reduction” state; meaning businesses essentially pay the late fees for the state’s loans. Normally, employers pay a rate of 6.0% on the first $7,000 in wages and receive a credit of 5.4% of that on their federal taxes. That is a net tax of 0.6%. Employers in states that fail to meet their obligations on loans to fund unemployment payments face a reduction in the tax credit. In Virginia’s case, that reduction is 0.3%, raising the net tax to 0.9%, an increase of 50%. If taxes are such job killers, a Republican tenet, and Bob has in effect raised taxes on businesses, it begs the question: just who or what is responsible for the improved Virginia unemployment rate?
It also begs the questions: 1) How will this play in the Forbes “Best States for Business” rankings and; 2) Is there a single Virginia elected or official of the Democratic Party of Virginia who is watching the henhouse or even knows where to look?