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The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives - Essay Example
Author : trishatorp
Pages 10 (2510 words)
Florida unemployment compensation law provides wage protection (partial and temporary income) to the jobless workers. For the creation of unemployment insurance fund, the employers are held liable to pay. This is done by way of tax towards Florida revenue department…
Instead, they want to pay more for the employees' salaries and wage protection. The business cost rising from the payment of tax towards unemployment compensation will have to recoup by the business firm through its business and actually the consumers bear the tax burden of the firm. The tax rate of unemployment insurance is based on the stability in working of the firms. A company with stable employment history will get deduction in tax rate. An employer is held liable for paying towards unemployment insurance in case he has quarterly payroll of $1500 or more in a calendar year.
"The tax rate for new employers is .0270 (2.7 percent). The first $7,000 in wages paid to each employee during a calendar year is taxable. Any amount over $7,000 for the year is excess wages and is not subject to tax. Excess wages can never be greater than gross wages."1
According to the Federal Unemployment Tax Act establishment and administration of the Unemployment Compensation Program is carried on mutually by the state and federal governments. Thus there exist dual system of state and federal in the tax program and the, payments of the employer towards payroll taxes is levied by both the state and federal governments. The rate of payment towards unemployment taxes by employees is on the basis of established tax rates and the history of employers work stability. ...
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