So, we just had all these people rally against "tax increases" on the 15th. Perry was very visible through out all this, talking about secession, maybe make Chuck Norris the President of Texas.
Perry, pandering to his base, gearing up for a tough re-election fight rejected the 555 million dollars the federal government wanted to give Texas to help their Unemployment funds. This will actually cause an increase in Umemployment Insurance Tax rate for 2010.
Now, rewind back to a few days back when Mark Kirk (R-IL) suggested that
"I think the people of Illinois are ready to shoot anyone who is going to raise taxes by that degree."
http://thinkprogress.org/...
Why all that anger? Well, if you read his statement, its that taxes were raised by 50% by Governor Quinn (D). The problem with percentages is that they are misleading without the actual increase. Quinn's plan is to raise the rate from 3% to 4.5%.
Now, lets go back to Texas. Have a look here:
http://www.twc.state.tx.us/...
In 2008, the Minimum Tax Rate was 0.10%, which increased to 0.26% in 2009. Doesn't sound like much? Lets put in it percent increase shall we - its a 160% increase.
Now, back to this year, at the current rate, the Unemployment Fund will be more than 833 mlllion below statutory levels by Oct 1.
http://www.tylerpaper.com/...
Statutory levels established by the Legislature require a balance of 1 percent of all taxable wages in the state, or $852.2 million, to be available for unemployment compensation. The fund is estimated to be at $18.8 million by October.
What does that mean? Texas will either have to:
- Borrow money from the Federal Government Interest free
- Or use low interest Bonds
I am guessing, the 1st option is not really an option for them, considering how much Perry hates the Federal government. So, 2nd right?
But in both cases, the states Employers will be paying for it. This will mean an INCREASE in the Minimum unemployment insurance tax rate, and this affects 75% of Texas's employers.
So, looking at how Republicans want to think about tax increases, I expect them to be all over this...
Oh well, its nothing new really.