Cornyn Introduces Amendment To Repeal Unfair Tax On Employees
Cornyn Introduces Amendment To Repeal Unfair Tax On Employees
U.S. Sen. John Cornyn, a member of the Senate Budget Committee, introduced a measure Friday to repeal a tax that costs Americans millions of dollars each year and should have expired 20 years ago. Sen. Cornyn proposed the amendment to the minimum wage bill currently pending in the Senate. It would repeal the surtax on the Federal Unemployment Tax Act (FUTA), which was imposed in 1976 to end a deficit created by a temporary ad hoc supplemental extended unemployment program. The debt was paid off in 1987, resulting in a growing surplus in the Federal Unemployment Trust Fund.
"It's time to put an end to this unfair tax, which has outlived its usefulness. This tax relief is a common sense approach to ease the burden on small businessesthe job engine of the economy," Sen. Cornyn said. "Elimination of this tax will put millions of dollars back into the pockets of Texans and all Americans, boosting the economy and expanding job opportunities."
It has become clear that the Federal Unemployment Trust Fund is sufficient to fund state and federal unemployment administrations without the surtax. The trust fund will continue to generate nearly $6 billion every year without the surtax. All accounts associated with the Federal Unemployment Trust Fund have ample balances. Elimination of the surtax is estimated to save Texas businesses approximately $135 million per year.
"As we continue debate on a minimum wage increase, it's critical that we ensure relief for small business owners to protect them from unnecessary and burdensome taxes and regulations," Sen. Cornyn said. "So I hope my colleagues will join me in supporting it."
The FUTA surtax of 0.2 percent was approved by Congress in 1976 as a temporary provision to re-establish the fiscal health of the Federal Unemployment Trust Fund. The surtax has served its purpose to restore the fiscal health of the fund with the combined balances of its accounts now projected by the U.S. Department of Labor to exceed $51 billion dollars by the end of 2011. Sen. Cornyn's amendment would repeal the FUTA 0.2 percent surtax, which is imposed on the first $7,000 earned by every worker.
http://cornyn.senate.gov/index.asp?f=record&lid=1&yid=1&rid=237297&pg=1