In addition, FUTA and state unemployment taxes will be payable no more often than quarterly, and the FUTA tax form will be simplified. This approach will reduce unnecessary paperwork. The practice of counting FUTA funds for spending on other programs, leaving only an IOU and an accounting entry behind, is contrary to the very reason why Congress placed these funds in the Unemployment Trust Fund in the first place. Although we believe the supplemental extension should never have been an employer obligation in the first place, the deficit created by this program was retired in 1987, yet the surtax has been extended until 2007. In recent years, this goal has been frustrated.
Employers pay more than enough in FUTA taxes to provide proper funding.
As a result, appropriations for state UI agencies have been severely inadequate, leading to a reduction in services for workers and employers. Employers have been required to pay a second, third, and fourth time - quadruple taxation. For example, inadequate funding to combat fraud and abuse and provide re-employment services also adds to results in workers collecting additional weeks of UI benefits. DOL estimates that UI claims on average now last 2 weeks longer than expected in this tight labor market. Most of the resulting additional tax burden falls on employers.