Paying for Incompetance
We and our children will be paying for the recent spate of government fiscal incompetence for literally decades. This letter I got from our payroll company provides a small but pointed reminder of this. Here is the key graf:
Can you imagine getting a note in January from Amazon.com, saying their costs last year were higher than they expected and they were going to send you an additional bill? Or how about BP sending all its customers a note saying that the cleanup costs in the Gulf cost it a lot of money and that they would all get an extra bill for X cents per gallon of fuel they purchased last year from BP?
Update: So in other words, I was hiring people in Florida in August of 2009, and will not find out until sometime in 2011 the true cost of this labor, because only now am I being told what taxes I have to pay on this labor. And people wonder why businesses are reluctant to hire. We may think we have a Constitutional ban on ex post facto law, but businessman know this is BS.
me:
Sigh. This is what we get for employing a bunch of highly paid politicians at the state and national level to take your money from you and spend it. The Democrats will run on a platform of small government and reduced spending and spend it on their friends, Light Rail, Healthcare and Green tech and the Republicans will run on a platform of small government and reduced spending and spend it on their friends, Foreign wars, Wall street bailouts and Faith based initiatives.
I fail to see a real alternative, although I harbor some hopes for libertarians finally getting more visibility on the political stage.
Other than that, moving to somewhere in South America, maybe?
February 4, 2011, 12:24 pmme:
Eh, messed up we/us and you/your in the last edit above. Anyway, the lack of accountability here is the real issue. Translated, the statement works out to "we planned badly, overspent and are unwilling to reign in expenditures, so now we'll bleed you dry because we can".
February 4, 2011, 12:27 pmCandyMan:
I've seen this several times over the years here in NY. That's how Federal unemployment backs up state unemployment insurance and just goes to illustrate that it's the employers that are on the hook for whatever the state's politicians do with their unemployment insurance.
February 4, 2011, 12:37 pmVitaeus:
I somehow doubt you will be able to use this as an expense in the current period to lower your profits and thus lower your taxes owed, as well.
February 4, 2011, 12:43 pmme:
But you should be able to amend your '09 tax return to reflect the new cost there by getting you a wee bit of a refund.
February 4, 2011, 1:19 pmNL:
Calder v. Bull (US 1798). Ex post facto prohibition only applies against criminal laws. Basically, the regular levying of taxes isn't part of the criminal code, so it's a retrospective act but not an ex post facto act.
I think if we successfully argued this point and got retrospective taxes classified as ex post facto actions, the main result would just be a modest increase in the level and scope of taxes going forward. A satisfying moral victory, followed by very little economic gain (or even sometimes an economic loss, since the levy going forward will need to be higher to get the budget numbers to crunch appropriately).
February 4, 2011, 1:20 pmMatt:
In Colorado, the UI rates for companies that have not laid anyone off are increasing, because the companies that DO lay people off are already paying the maximum rate. Of course, all of this, unemployment insurance, social security insurance, medicare, etc. is just welfare, not insurance.
February 4, 2011, 1:30 pmDr. T:
If Florida did not put clauses about having to pay borrowing costs in its unemployment "insurance" laws and regulations, all businesses would have a solid legal case for not paying the retroactive assessment. Retroactive taxes are just as illegal as retroactive criminal statutes.
Side Note: If unemployment insurance were truly insurance, it would be purchased privately by employees (like life insurance and disability insuranc), and not mandated by governments.
February 4, 2011, 4:08 pmMatt:
Sounds like owing a favor to the mafia, without the part where you agreed to owe a favor to the mafia.
February 4, 2011, 9:29 pmMark:
Unemployment insurance isn't even the worse issue. Worker Compensation is. That system is the worst designed system ever. In Minnesota where I run a business (as I am sure it is in most states) the assumption of innocence is not given to the employer in a work comp case. It is assumed that the employer is "guilty".
And, what makes it worse is that the employee gets to run the entire process. They get to choose where they go to get "treatment". They get to choose what treatment options they want. So, of course, the incentive is to choose a provider that is going to give them costly treatments and give them the most time off.
On the other hand, the incentives to the providers is just insane. We allow the people who are going to get PAID to make the determination of what treatment is needed. So you get incredibly costly and lengthy treatment plans for even minor injuries. AS I always say, if a person sustained most of the injuries my employees do while playing softball or lifting something in their house, they would never go to a doctor and never miss any work. But, sustain an even more minor "injury" at work and they are at the doctors 20 times running up the tab.
What the system should be like is a program that gets the worker back to work. The employer, who foots the bill, should determine all the medical treatment. We should be allowed to dictate where the employee goes to the doctor. Once that doctor sees the patient then the treatment should be fixed. If the employee disagrees with the treatment plan then the burden of proof should be on them.
The other aspect is that the employees in Minnesota are not even held to the law. The law reads that they only have 48 hours to report their injury. But, we have employees that routinely wait two weeks before reporting. Then there are no witnesses that can verify the injury at all. Yet, these injuries are treated just the same.
February 4, 2011, 11:29 pmMatt:
I've never understood why unemployment insurance is always a government function. It seems like this could easily be run by the private sector, and then we could weed out deadbeats who game the system, without referring to those who legitimately receive paid-for benefits as recipients of "welfare."
February 6, 2011, 1:33 pmMatt:
My last comment (1:33) and this one are made from a different Matt earlier in the thread, FYI. Way too common of a name. Roll calls in school were confusing as hell for us!
February 6, 2011, 1:38 pmIgotBupkis, President, United Anarchist Society:
> Of course, all of this, unemployment insurance, social security insurance, medicare, etc. is just welfare, not insurance.
No, it's "insurance" -- there are individuals who pay for it -- employers pay directly, and employees pay indirectly with lowered salaries.
What it's not is a properly financed mechanism.
Instead of a properly financed mechanism with payins and payouts and a balance between the two, using GAAP, it's a government-organized Ponzi scheme. Anyone but the government handled things this way, the organization would be shut down and its officers under indictment.
> Side Note: If unemployment insurance were truly insurance, it would be purchased privately by employees (like life insurance and disability insuranc), and not mandated by governments.
No, it could be mandated by the government as a part of employing employees. It just should be handled by private investment firms, just like Social Security funds are mandated, and could be, and should be, but aren't, placed into a government approved pension fund.
February 7, 2011, 7:05 ammarkm:
"Retroactive taxes are just as illegal as retroactive criminal statutes." Sadly, not according to the federal courts. E,g., Congress fiddled with the income tax law for 2010 until the end of 2010, leaving the IRS and tax software writers scrambling to get the new codes out in January 2011 - retroactive to Jan. 1, 2010.
And the judges who approve such taxes get paid out of them. It's a glaring conflict of interest, but if they recused themselves, who would be left?
February 7, 2011, 6:09 pmchuck martel:
The case could be made that unemployment "insurance" is actually mortgage and car payment insurance.
February 8, 2011, 5:46 pm