5 ms·

Here is an article that does a better job of explaining how this will increase the amount of federal taxes paid by businesses in California: https://www.ocregi

Here is an article that does a better job of explaining how this will increase the amount of federal taxes paid by businesses in California: https://www.ocregister.com/2023/03/27/california-had-a-97-5-billion-surplus-why-are-employers-being-forced-to-pay-off-the-states-defaulted-loans/ https://www.ocregister.com/2023/03/27/california-had-a-97-5-... It sounds like it will be in the ballpark of costing businesses a couple of hundred dollars per year for each employee.

nickpeterson 3y ago
Is it possible that it does t get fully relayed in one year and turns into 400 a year tax per employee next year?
wpietri 3y ago
Thanks. The Hoover Institution is... controversial [1], so I was hoping for another source. Although the link you have here is an opinion piece from a Republican congressperson, so I'm going to keep looking for something more neutral. [1] e.g., https://stanforddaily.com/2020/11/17/frankly-speaking-stanford-and-the-hoover-institution/ https://stanforddaily.com/2020/11/17/frankly-speaking-stanfo...
- woodruffw 3y ago
  Here's a neutral source[1] (I've also linked it elsewhere in the thread). IMO, the Hoover Institution's writing is deeply misleading here: it implies a degree of hardship that $21 per employee does not seriously pose. [1]: https://californiapayroll.com/blog/tax-alert-futa-credit-reduction-for-2022-wages/ https://californiapayroll.com/blog/tax-alert-futa-credit-red...
- wpietri 3y ago
  Ok, here's something from the state itself. Down the page there's a chart showing how it will be paid back over time: https://lao.ca.gov/Publications/Report/4543 https://lao.ca.gov/Publications/Report/4543 Either way this is going to get paid back by CA taxpayers. So it seems like the main question here is whether the tax burden should fall on employers specifically or on the general fund. It looks like corporate taxes run around 10% of CA tax revenues normally: https://ebudget.ca.gov/2022-23/pdf/BudgetSummary/RevenueEstimates.pdf https://ebudget.ca.gov/2022-23/pdf/BudgetSummary/RevenueEsti... Given that, I think I'm ok with unemployment insurance costs falling mainly on employers.
  - dragonwriter 3y ago
    > So it seems like the main question here is whether the tax burden should fall on employers specifically or on the general fund. I’m not even sure the state could pay it back directly, and if it could, it might require either cutting programs by large multiples of the amount needed or raising taxes by an amount significantly greater than the amount of the debt: Constitutional programmed baseline funding plus maintenance of effort requirements tied to federal funding plus Constitutionally programmed use of incremental revenue means that: (1) the state (by this, I mean the executive and legislature working together; the people, of course, as the ultimate authority in the state can do what they want through initiative) can’t arbitrarily cut some large categories of spending, (2) the cost of cutting other large categories of spending is greater than a $1 of federal funding dedicated to the same purpose for each dollar cut, (3) even if the 2/3 majority necessary to raise taxes is marshalled, a substantial share of any new revenue from taxes would need to go to specified programs that get a share of incremental revenues, and (4) total state spending (irrespective of revenue, and getting the required supermajority to raise taxes, etc.) is capped by the Gann Limit. Letting the Fed tax employers directly avoids all of those constraints, even if it doesn’t optimally distribute the costs.
- Fatnino 3y ago
  That's a whole lot of "no wonder everyone is leaving California" from an organization based in California.
mjevans 3y ago
The article levies some accusations of guilt / negligence at the state of California, but appears to have zero reflection about even possible causes. WHY was so much fraud possible during the pandemic (and possibly other times) in the first place. Is it possible this is because the departments responsible are normally understaffed and when handling a pandemic surge had zero ability to scale up? Is this a budget or law codification issue? The article did mention a recent surplus, but didn't talk about any reasons it might have not not been allocated to paying off this federal loan. My cynic side suppositions it might be one of the only ways the state can effectively raise taxes overall.
- wpietri 3y ago
  FYI, it's not an article, it's a Republican opinion piece. Which may explain the lack of reflection.
- NtochkaNzvanova 3y ago
  > WHY was so much fraud possible during the pandemic (and possibly other times) in the first place. Is it possible this is because the departments responsible are normally understaffed and when handling a pandemic surge had zero ability to scale up? Ah yes, of course! The solution to our dysfunctional bureaucracy is to... add more people to it!

nickpeterson 3y ago

Is it possible that it does t get fully relayed in one year and turns into 400 a year tax per employee next year?

wpietri 3y ago

Thanks. The Hoover Institution is... controversial [1], so I was hoping for another source. Although the link you have here is an opinion piece from a Republican congressperson, so I'm going to keep looking for something more neutral. [1] e.g., https://stanforddaily.com/2020/11/17/frankly-speaking-stanford-and-the-hoover-institution/ https://stanforddaily.com/2020/11/17/frankly-speaking-stanfo...

woodruffw 3y ago
Here's a neutral source[1] (I've also linked it elsewhere in the thread). IMO, the Hoover Institution's writing is deeply misleading here: it implies a degree of hardship that $21 per employee does not seriously pose. [1]: https://californiapayroll.com/blog/tax-alert-futa-credit-reduction-for-2022-wages/ https://californiapayroll.com/blog/tax-alert-futa-credit-red...
wpietri 3y ago
Ok, here's something from the state itself. Down the page there's a chart showing how it will be paid back over time: https://lao.ca.gov/Publications/Report/4543 https://lao.ca.gov/Publications/Report/4543 Either way this is going to get paid back by CA taxpayers. So it seems like the main question here is whether the tax burden should fall on employers specifically or on the general fund. It looks like corporate taxes run around 10% of CA tax revenues normally: https://ebudget.ca.gov/2022-23/pdf/BudgetSummary/RevenueEstimates.pdf https://ebudget.ca.gov/2022-23/pdf/BudgetSummary/RevenueEsti... Given that, I think I'm ok with unemployment insurance costs falling mainly on employers.
- dragonwriter 3y ago
  > So it seems like the main question here is whether the tax burden should fall on employers specifically or on the general fund. I’m not even sure the state could pay it back directly, and if it could, it might require either cutting programs by large multiples of the amount needed or raising taxes by an amount significantly greater than the amount of the debt: Constitutional programmed baseline funding plus maintenance of effort requirements tied to federal funding plus Constitutionally programmed use of incremental revenue means that: (1) the state (by this, I mean the executive and legislature working together; the people, of course, as the ultimate authority in the state can do what they want through initiative) can’t arbitrarily cut some large categories of spending, (2) the cost of cutting other large categories of spending is greater than a $1 of federal funding dedicated to the same purpose for each dollar cut, (3) even if the 2/3 majority necessary to raise taxes is marshalled, a substantial share of any new revenue from taxes would need to go to specified programs that get a share of incremental revenues, and (4) total state spending (irrespective of revenue, and getting the required supermajority to raise taxes, etc.) is capped by the Gann Limit. Letting the Fed tax employers directly avoids all of those constraints, even if it doesn’t optimally distribute the costs.
Fatnino 3y ago
That's a whole lot of "no wonder everyone is leaving California" from an organization based in California.

mjevans 3y ago

The article levies some accusations of guilt / negligence at the state of California, but appears to have zero reflection about even possible causes. WHY was so much fraud possible during the pandemic (and possibly other times) in the first place. Is it possible this is because the departments responsible are normally understaffed and when handling a pandemic surge had zero ability to scale up? Is this a budget or law codification issue? The article did mention a recent surplus, but didn't talk about any reasons it might have not not been allocated to paying off this federal loan. My cynic side suppositions it might be one of the only ways the state can effectively raise taxes overall.

wpietri 3y ago
FYI, it's not an article, it's a Republican opinion piece. Which may explain the lack of reflection.
NtochkaNzvanova 3y ago
> WHY was so much fraud possible during the pandemic (and possibly other times) in the first place. Is it possible this is because the departments responsible are normally understaffed and when handling a pandemic surge had zero ability to scale up? Ah yes, of course! The solution to our dysfunctional bureaucracy is to... add more people to it!