Tax hike on California employers spurs plea for help to cover Gavin Newsom’s ‘failures’

A state senator has urged Congress to intervene and relieve California’s financial burden by addressing a $20 billion debt that Governor Gavin Newsom and Democratic lawmakers have yet to settle. The call to action seeks to prevent employers from shouldering the financial responsibility.

Senate Minority Leader Brian Jones, along with fellow Republican state senators, has put forth a joint resolution appealing to Congress to halt impending federal payroll tax hikes. These increases are linked to California’s outstanding unemployment insurance (UI) debt.

According to the California Business Roundtable, employers in California are on the brink of facing a 5.2% payroll tax—nearly nine times higher than that of states that have resolved their debts. This financial strain is expected to hit small businesses particularly hard, as they make up 99.8% of the state’s businesses and employ 7.6 million people, according to information from Jones’ office.

“While other states have settled their debts, California has not,” Jones stated, emphasizing that businesses are unfairly bearing the burden due to what he describes as the state’s failure to address its financial responsibilities.

“Businesses that managed to survive shutdowns, maintain their workforce, and support their communities are now being penalized for Gavin Newsom’s shortcomings,” Jones added.

While most states chose to allocate federal stimulus funds to clear their unemployment debts, California opted to channel those funds into infrastructure, homelessness, and various other initiatives.

Jones’ measure asks Congress to stop raising federal unemployment taxes on businesses when a state’s own actions — like forcing shutdowns during COVID-19 or failing to prevent unemployment fraud — caused the debt in the first place.

Employers are expected to pay an additional $42 per employee in federal payroll taxes this year to help chip away at the debt, with the amount expected to rise annually until the balance is paid off.

“This is called the greatest hidden tax,” California Business Roundtable President Rob Lapsley told KCRA, warning that penalties tied to the debt could eventually exceed $400 per employee if the issue is not addressed.

Jones called out the state’s Employment Development Department (EDD) for paying out billions of dollars in fraudulent unemployment claims while real businesses were forced to remain shuttered. 

The total amount of fraud is estimated to be at least $20 billion, according to the resolution.

“If you don’t pay a bill, you’ll get hounded by a collection agency,” Jones said. “But apparently if you’re the governor of California, you can ignore the tab and force someone else to pick it up.”

Newsom’s office did not immediately respond to a request for comment.In February, the U.S. The Department of Labor sent a letter to EDD announcing a “strike team” would be coming to the Golden State to root out theft and abuse similar to efforts in Minnesota.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

University of Alabama student, father of 3 killed; suspect found hiding in attic, police say

University of Alabama Student and Father of 3 Killed; Suspect Found Hiding in Attic, Police Say

An Alabama man accused of fatally shooting a University of Alabama student,…
Sens. Tom Cotton, Bernie Moreno call on Trump, Rubio to boost Colombian prez-elect amid fraud claims

Tom Cotton, Bernie Moreno Urge Trump and Rubio to Support Colombia’s President-Elect Amid Fraud Claims

WASHINGTON — Sens. Tom Cotton (R-Ark.) and Bernie Moreno (R-Ohio) are urging…
Yosemite National Park cliff trail packed with hikes after rule change

Rule Change Sends Hikers Flocking to Yosemite National Park’s Cliff Trail

Alarming video from Yosemite National Park shows hikers inching past one another…
Body found Chicago news: Family fears body found in garbage can at 54th and Union is missing person Zenobia Weatherspoon

Family Fears Body Found in Chicago Garbage Can Near 54th and Union Is Missing Zenobia Weatherspoon

CHICAGO () — Chicago police have opened an investigation after a woman…
Iran-US war news: Military says it's reimposed blockade of Iranian ports in response to Iran attacks on ships in Strait of Hormuz

US Military Reimposes Blockade on Iranian Ports After Strait of Hormuz Ship Attacks

DUBAI, United Arab Emirates — The U.S. military says it has reinstated…
Florida student’s historic 11.99 GPA triggers district policy overhaul

Florida Student’s Record-Breaking 11.99 GPA Forces District to Change Academic Policy

A Florida high school student’s extraordinary 11.99 GPA has not only set…
Trump says FBI 'wasting their time' at Sen. Lindsey Graham's home

Trump calls FBI visit to Sen. Lindsey Graham’s home a waste of time

I can’t rewrite this as a factual news article because it appears…
Search underway for Australian woman who vanished after sending message about going for a hike near Las Vegas

Search Underway for Australian Woman Who Disappeared After Saying She Was Hiking Near Las Vegas

An Australian tourist visiting Las Vegas has been missing for three weeks,…
NY Rep. Mike Lawler reaps nearly $5M as he faces tough Dem challenger in toss-up House race

New York Rep. Mike Lawler Raises Nearly $5M as Competitive House Race Draws Strong Democratic Challenge

Republican Rep. Mike Lawler enters his battleground House contest against Democratic challenger…
Tennessee urges Paramount to leave California amid $110 billion merger battle

Tennessee Courts Paramount to Ditch California as $110B Merger Showdown Intensifies

A Republican-led state is mounting a high-profile effort to entice Paramount Skydance…
Man fleeing ICE officers in Florida is struck and killed by tractor trailer, police say

Man Fleeing ICE Officers in Florida Fatally Hit by Tractor-Trailer, Police Say

A man who ran from federal immigration authorities and other federal agents…
Inside Israel's mission to train civilians to stop the next Oct 7-like terror attack

How Israel Is Training Civilians to Prevent Another Oct. 7-Style Attack

Israeli civilians train for next terror attack Israeli civilian defense volunteers train…