Reed and Kerry seek to fix unemployment penalty for unemployed people who take temporary jobs

[karynnj]

New England Democrats are trying to build bipartisan support in Congress to change a federal law that slashes the benefits of workers who take low-paying part-time or temporary jobs while collecting unemployment.

< snip - after failing to get it in the Senate Jobs bill,>

Reed and Kerry, both Democrats, still hope to make the change as legislators work out the differences in the House and Senate versions of the bill, according to staff. Failing that, they will seek to insert the provision to other legislation that is moving through Congress.
<snip>
Thousands of laid-off workers seeking to renew their benefits for a second year, not uncommon during this recession, were shocked to learn of the penalty for performing some alternate work while looking for a permanent job. When they do, their benefits are recalculated based on the low pay from the part-time or temporary work.
<snip>
“It defies common sense to penalize workers for taking part-time jobs when it is the only choice they have to get the bills paid,’’ Kerry said in a statement. “The last time I checked, we were supposed to be standing by people who get up every day, hunt for work, and do what it takes to help their families.’’

http://www.boston.com/business/articles/2010/03/12/ne_democrats_seek_to_fix_unemployment_glitch/

Doing this rewards people who are doing the right thing for themselves and their families.

[quiet.american]

1. I really hope they can push this through. Worth the attention. nt

[karynnj]

2. I hope so too - it has been done in the past

The current rule punishes the people who play by the rules. I can't imagine how hard it would be if I was unemployed and had an offer of work, but it was just for say 4 months. That I would have to consider the down side of not even having the level of unemployment I had would make what should be a simple decision very very hard.

[Inuca]

3. It defies common sense indeed n/t

[LisaM]

4. Oh, Senator Kerry

What a fine, fine president he would have made. That the American people were too stupid to realize it is a source of embarrassment to me.

[karynnj]

8. I completely agree with you and he came very very close

I regret that so many Democrats never saw enough of him to see how extraordinary he really is. But, he would have faced both Houses controlled by Republicans had he won in 2004. I was one of the JK group here and we really wanted him to run in 2008.

Kerry has always cared about those who need help - back to his days as an advocate for veterans (which was as important to him as opposing the war) and a prosecutor.

Here's what Kerry said of just the TANF extension - http://www.c-spanvideo.org/videoLibrary/clip.php?appid=... (It looks like Kerry's amendment was combined with Murray's - and the total cost was not offset - so they needed 60 votes to waive the budget and it failed - but it seems likely that he will continue to try to get it added to other things.)

[Lugnut]

5. Here's something I'd like to see happen.

Unemployment compensation is now taxable which is an added burden to the unemployed. It needs to be stopped.

[ProSense]

6. The stimulus bill

provided some relief:

Some unemployment benefits tax exempt in 2009. Normally, unemployment compensation is taxable. But up to $2,400 in unemployment compensation received in 2009 will be exempt from taxes.

[Lugnut]

9. At least that's something.

I'd prefer rescinding the law entirely.

[karynnj]

10. Not sure I agree with totally eliminating it

You pay taxes on a year's income. If you are on unemployment the entire year, I think there would be little or no taxes due - and no medicare/SS taken out in any case. There will be people who are employed, making the same amount and if you are owe, they will owe as well - and on top of it they will have paid the payroll taxes.

Even more consider someone with a high income, say, $160,000 a year who is unemployed for, say, the last 3 months of a year. That person would have made $120,000 in the first 9 months and then unemployment for the last 3. Do you think it fair that he/she pays no taxes on the unemployment payments when his/her income for the year was over $120,000? (This person likely will have enough withheld because the withholding was assuming a higher income.)

[4lbs]

13. So, change it so that anyone that receives less than $24,000 in total compensation for the year

doesn't pay taxes on or have their unemployment reduced.

[ProSense]

14. Here's the problem

a person earning $24,000 isn't exempt from taxes. Of course, the unemployment income would likely represent only a percentage of the person's actual income, but I still don't see how they'd get away with eliminating it on such a significant amount.

[4lbs]

17. No, here's what I mean.

Say a person earning $10/hour (approximately $20,000 per year based on a 2000 hour annual workload) earns $15,000 for 9 months of the year, and then gets laid off. They then get unemployment that amounts to $900 for the remaining 3 months.

So, make it so they don't pay taxes on the $900 unemployment received, but do pay taxes on the $15,000 they earned at the job. That would be $200 to $300 less in taxes.

On say, 15 million people collecting unemployment, that would come out to about 3 or 4 billion dollars in less taxes from the poorer among us.

Those people would definitely not be saving that extra money, but spending it. Think it of as an extra 3 to 4 billion dollar stimulus boost.

[karynnj]

19. How would you defend that to someone working at a job for the entire

year that pays $15,900 for the entire year?

Additionally, your estimate of the additional tax is wrong. A person making 15,900 for the year would not pay an additional $200 to $300, but more likely $90. Here is a link to the tax tables - http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html Remember that the income they refer to is "taxable income", which subtracts a minimum of the standard deduction and the personal exemption. So, the remaining income would all be taxed at the 10% rate even if you assume that you are speaking of someone who is single.

The problem Reed and Kerry are working on actually would help people who, on average, will need it more than the people you speak of. They are getting less on unemployment (or even not qualifying) than they would have received had they not taken a job.

[ProSense]

7. Excellent. Thanks for posting n/t

[jumptheshadow]

11. Good move, but not enough

Please drop the taxes on unemployment.

[ProSense]

12. This is way better than dropping the tax.

This needs to happen and likely represents an amount more significant than any tax. How many people fear taking a part-time/temporary job because they'll lose their benefits?

Still, there is relief on taxing unemployment benefits, see here.

[politicasista]

15. Yep. Something is better than nothing

(i.e. Health care bill, etc).

[butterfly77]

16. This is what they do to people on welfare...

when they do temporary work...

[karynnj]

18. Yes - if the work is on the books

So, the people who play by the rules are hurt by doing what should have been the right thing.

[saltpoint]

20. Two very good folks doing something very much worth doing.

Recommended.