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Poindexter: An expansion of tax benefits
would equal a tax on business
Wednesday, April 15, 2009
By CHARLES BOOTHE - Staff Writer

Del. Charles Poindexter (R-Franklin County) defended his vote to defeat a measure to expand unemployment benefits in the House last week, calling the proposal a "tax on business."

The bill, if passed, would have used $123 million in federal stimulus money, but with a requirement to make permanent changes in extending unemployment compensation coverage. Those changes, initiated by Gov. Tim Kaine, would have extended the benefits to part-time workers and to separated workers in training programs.

House Republicans contended that of the $187 million available in stimulus funds for the state unemployment insurance program, $62.5 million can be used with no strings attached. The $123 million has strings, they said, and once the money runs outs, businesses will have to pick up the tab with higher payroll taxes.

"It sounds like the chair of the Democratic National Party is playing politics for the November elections instead of addressing the federal strings attached to the stimulus money," Poindexter said, referring to Kaine's vocal and often heated support of the measure.

The state would be forced to change its laws "for policies that the commonwealth has never found appropriate and which are long-term, permanent policies," Poindexter said. "In fact, this will hurt maintaining current jobs and creating new jobs," he added. "We need to put people back to work."

Poindexter said the House did accept, and he supported, the $62.5 million in stimulus money to simply be used to extend unemployment benefits with no requirement to continue the extension when the one-time money runs out. Unemployment benefits have also been extended 13 weeks in addition to the 20-week extension approved earlier this year by the federal government.

"This (the defeated proposal) would cost employers additional money that will hurt existing jobs and negatively impact them in hiring new employees," he said. "This is a tax on businesses."

The state chamber of commerce, as well as most local chambers of commerce, sided with Poindexter and voiced opposition to the bill.

State Republicans said the measure would have turned the state's unemployment compensation program, which is designed to provide temporary relief, into an another entitlement program.

Kaine and supporters of the bill said the need is too great now to turn down the federal money, and the state can roll back the unemployment compensation expansions at a later date.

But GOP leaders said in a joint statement last week that it's very difficult to get that rollback accomplished once a program starts. "If the expansions are bad policy, it would be irresponsible to pass them in the first place," said Del. Sam Nixon. "We all know that once the legislature passes an entitlement, the chances of rolling it back are nil."

Texas Gov. Rick Perry also turned down the stimulus money, which amounted to more than $550 million for his state, saying the required changes in state law would result in a burden for businesses once the federal money runs out. Perry also said expanding the benefits to part-time workers will discourage them from trying to find full-time employment.

Other states, including Louisiana, Mississippi, South Carolina and Alaska, are also considering rejecting the stimulus money.

“Entrepreneurs and their small business enterprises are responsible for almost all the economic growth in the United States".
Ronald Reagan
Courtesy Ronald Reagan Library
“Whatever else history says about me when I’m gone, I hope it will record that I appealed to your best hopes, not your worst fears, to your confidence rather than your doubts. My dream is that you will travel the road ahead with liberty’s lamp guiding your steps and opportunity’s arm steadying your way".
Ronald Reagan
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