Will Virginia Stimulate Its State Unemployment Fund?

Because one marginal tax may have to be raised marginally!

Virginia is one of many states deciding whether to accept federal stimulus money for its state unemployment insurance fund. $125 million dollars in magical Obama money (Disney Dollars) awaits the fund -- which, like all unemployment funds, is depleting, due to all the unemployment.

 But some Republican lawmakers are urging the governor to decline the money, as it would require the state to change unemployment tax laws.

In order for the state to accept the $125 million, it must make unemployment benefits available to certain new groups of unemployed people, such as those looking to work part-time.

Republican lawmakers and "business advocates" argue that once the stimulus funds are exhausted in two years, the state would be "stuck" with the expanded benefits and forced to raise the unemployment tax. Virginia businesses currently pay an average $98 per employee per year in the tax, and state reports estimate that this would rise approximately $4-$5 with the expansion. And then no businesses would ever be able to hire anyone ever again.

Uh huh. Well another reason that unemployment taxes may go up in the future is that, if the state doesn't accept the stimulus money, the unemployment fund could go bankrupt very soon -- still during the Great Recession, with more people joining the ranks of the unemployed each day, meaning more unemployment claims and a smaller unemployment tax base. Also, more starvation.

On the other hand, the state could accept the money, keep the floor from falling out under families (and businesses, because families spend money on businesses!), delay the unemployment fund's depletion for another two years, when the economy will presumably be on the mend, meaning unemployment claims will go down, and the state fund will replenish its coffers for the next hellish recession.

Or those LAZY BUMS COULD JUST GET JOBS.

Jim Newell is a "business advocate" for Wonkette and IvyGate.

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