Written by Molly Kivi, who will appear on Solidarity LIVE Thursday at 1:30pm
On November 15, 2020, New York Governor Andrew M. Cuomo delivered remarks at Riverside Church on the inequities in America saying “COVID was low tide in America, and it showed us the ugliness and flaws deep down in our society. And if we are smart, and if we are secure, we must now acknowledge the ugliness and correct it as we go forward.”
The Unemployment Insurance program is one of those inequities that has surfaced. The benefit payments do not factor-in purchase power, the tax structure is regressive, the employer’s tax rate increases when layoffs occur through no fault of the employer, and smaller businesses are paying at higher rates than large businesses. The trust fund that holds the money to distribute benefit payments hasn’t collected enough revenue to comply with the Department of Labor standards for decades. The consequence of not hitting these targets is paying interest on loans that would otherwise be interest-free. The projected unemployment trust fund deficit for 2021 is 4.7 billion dollars, and the Commonwealth will be borrowing funds from the US Treasury costing the Massachusetts taxpayers 60 million in 2021. Additionally, the Commonwealth will lose out on the FUTA tax credit worth 1.4 billion dollars.
I am advocating for an equitable and easy to understand tax structure. One that would create a solvent trust for normal times and prepare us for future economic downturns, natural disasters, and economic shifts. Benefit payments should factor in purchase power, experience rating system should be abolished, the tax should be levied on both the employer and the employee, and the tax base should capture the full base and not be capped.
This proposal would bring this social insurance up to the standards of
other developed nations.
Tune in Thursday at 1:30 to hear more about how we can fix our unemployment system that is a lifeline for so many during this crisis.