How Pennsylvania Drives Up Unemployment

The strategy is simple: cripple business with taxes and regulations so that it is unable to employ people, which will drive them into the arms of Big Government. It worked for FDR, keeping him in power for so long that the 22nd Amendment was passed to prevent another socialist demagogue from entrenching himself for life. Here‘s how the strategy is playing out now in Pennsylvania:

After hiring 19 employees in the middle of a recession last year, Jessica Azur can’t figure out how Pennsylvania can slap her family’s information technology company in Moon with a 60 percent increase in the rate it is taxed for the state’s jobless benefits fund.

“It’s incredibly surprising. This hurts. It really hurts small businesses,” said Azur, human resources manager at Questeq Inc., which provides services to public and private schools.

Questeq, along with the state’s other employers, is paying more in unemployment insurance taxes this year to replenish the jobless benefits fund that has been drained by unemployment that hit 8.8 percent in January, two percentage points higher than the same month a year ago. Company executives and business organizations say increasing taxes in the midst of a recession is the wrong tactic for turning around the economy.

“We were hanging on by our fingernails; now, we’re down to the finger. It’s another tax (increase) on small businesses, and we’re not even back on our feet yet,” said Marilyn Landis, past president of the National Small Business Association and owner of a business consulting firm on the North Side.

This is how Pennsylvania punishes businesses foolish enough to hire:

Employers will be taxed at rates ranging from 2.237 percent to 10.38 percent of the first $8,000 a worker earns, meaning the employer will pay at least $23.70 for each $1,000 a worker receives. New employers pay a tax rate of 3.70 percent, except for construction firms that are hit with a 10.26 percent tax, according to the state.

The effects of stealing money from cash-strapped would-be employers and using it to pay people not to work are predictable.

The tax increase is a “double whammy” in the midst of a recession, said Thomas Henschke, acting president of SMC Business Councils in Churchill, a business advocacy group of 5,000 small manufacturers and other businesses in Western Pennsylvania. …

“It’s really a detriment to job creation and economic growth,” said Samuel Denisco, government affairs director for the Pennsylvania Chamber of Business and Industry, a Harrisburg-based association whose membership employs almost half of the state’s private work force.

The existing system is flawed because it penalizes employers that are able to maintain their business without laying off workers who tap into the benefits fund, Henschke said.

“That’s like getting hit below the belt. They’ve been knocked to their knees and they’re trying to get up … but it’s like someone’s stepping on their fingers,” Henschke added.

Eventually businesses that can’t afford to join crony capitalists (Goldman Sachs, GE, GM, etc.) at the Big Government table succumb and go under, creating more boarded-up storefronts, welfare dependents, and presumably, Democrat voters. Just call it Hope & Change.

On a tip from Forest. Cross-posted at Moonbattery.

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