Surge in Jobless Claims Spurs Tax Hikes

35 states increase unemployment taxes after huge benefits outflow

Businesses will get hit this year with the bill for the unemployment benefits paid to out-of-work employees, as hard-pressed states hike taxes on companies to fund those benefits. A recent survey found 35 states expect to collect more unemployment taxes this year than last, with states citing increases ranging from 2.5% to 600%.

"A few states have doubled or more than doubled their tax collection," says Rich Hobbie, executive director of the National Association of State Workforce Agencies (NASWA). In addition to Hawaii, which expects a 600% increase, he cited Nebraska, at 150%, South Dakota (140%), Idaho (115%) and Alabama (90%).

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