Soaring Unemployment Insurance Brings Back to Old “Tax Massachusetts” Label

The state is dead last again – this time with corporate-paid UI tax rates giving new life to the old “Tax Massachusetts” label.

This means that businesses large and small face the highest unemployment insurance tax when they lay off an employee. It could also deter others from settling here, experts say.

Massachusetts once had the highest unemployment rate, at 16.1%, in July of last year. It has now fallen back to 5.4% – still low, but not as bad as 6.9% of California Brand.

Now UI assurance is a big factor.

Massachusetts’ highest rate, 18.55%, is by far the highest in the country, with Maryland ranking far second with a peak rate of 13.5%, the DC Based Tax Foundation Reports.

“The Tax Foundation report shows that under the current leadership of the State House, Massachusetts is not only at a disadvantage relative to New Hampshire and the rest of New England, but we are now dead last in all. country as to how our state treats businesses on the unemployment insurance tax, ”said Paul Diego Craney, spokesperson for the Mass Fiscal Alliance.

The author of the report for the Non-Partisan Tax Foundation tells the Herald that such a high rate can “cripple employers” who will be at the mercy of any employee they lay off as the nation emerges from the pandemic. This fear factor can slow down hiring.

“This high rate shifts the burden on employers – especially those who are willing to take a risk on an employee,” said Jared Walczak, one of the authors of the Tax Foundation report.

An employee fired or fired for just about any reason can collect unemployment with the former employer taking the unemployment insurance tab.

Coupled with the millionaires’ tax on the 2022 ballot, Craney says we’re back to the good old days of “Tax Massachusetts”.

As The Herald reported late last month, the Baker administration is still uncertain how much money it will ultimately borrow to cover the cost of pandemic-era claims on the state’s unemployment system. Bay.

The administration argues that while 18.55% is the highest rate in the highest fee schedule, 14.37% is the highest maximum unemployment insurance rate in recent history.

In addition, the maximum weekly benefit amounts, claim volumes and the taxable salary base vary from state to state. For example, Maryland’s maximum weekly benefit rate is $ 430 while Massachusetts’s is $ 974, which is 126.5% higher than Maryland.

This summer, Gov. Charlie Baker also proposed spending $ 1 billion in Commonwealth excess tax revenue to stabilize the UI trust fund, a priority for the employer community. The legislature ultimately included $ 500 million for the UI trust fund in the final ARPA bill.

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