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Unemployment insurance tax cut would mean jobs |
from NewsLink, Vol. 1, No. 2, Winter 1997
The Massachusetts economy would benefit greatly if the state legislature cut the unemployment insurance (UI) rate by 7.43%. A rate cut would create 13,080 jobs, according to BHI's State Tax Analysis Modeling Program.Reducing the tax rate from the 1996 UI rate would induce employers in Massachusetts to create more jobs by reducing the cost of adding workers. STAMP found that employment in the state is significantly and negatively related to UI rates.
Massachusetts employers face the second highest UI costs per employee in the nation Špartly because benefits in Massachusetts are more generous than in other states. Governor Weld and Lt. Governor Cellucci filed legislation for a rate cut earlier this year. The legislation is supported by House Speaker Tom Finneran and a majority of the House.
Despite reform and a growing economy, the cost of doing business in Massachusetts continues to place the Bay State at a competitive disadvantage.
The proposed UI tax rate reduction, the first since 1986, would save Massachusetts businesses $82 million in 1997.
NewsLink is the quarterly newsletter of the Beacon Hill Institute for Public Policy Research at Suffolk University. © 1996-1997. All rights reserved.
Revised on 9/9/02 4:06 PM