"Milking The System," Ctd

by Chris Bodenner

A reader writes:

As the owner of a small business, I have to correct the reader who wrote that since he paid unemployment tax throughout the years, he should not feel guilty about claiming unemployment benefits. The reality is that employers pay unemployment taxes, not employees. The federal tax rate under FUTA (the Federal Unemployment Tax Act) is 6.2% of the first $7,000 of income per person. Each state also has a state unemployment rate. Here is Minnesota, it's an "experiential" tax rate, which means that if I had any ex-employees file to claim unemployment benefits, my tax rate automatically goes up.

I sadly know of several friends who are indeed milking the system. They have been unemployed for almost a year now, enjoying the unemployment checks, making no real effort to find a job. They are hurting not just their former employer, but other businesses such as myself; I've seen rate increases every year, even though I've never laid anyone off in the five years we've been open. The kicker is that since I am self-employed, if we were to go out of business, I could not claim unemployment benefits.