Payroll Tax Increase and Iowa Jobs

Iowa Job-seekers and wage-earners will feel the sting of the longest running unemployment benefits extension in U.S. history.

Thomas L Cardella & Associates expected to create 500 jobs in Cedar Rapids, Iowa. But now 200 of those jobs will be located in El Paso, Texas. The firm changed their plans because of the effect of the increased payroll tax. The company’s payroll tax is increasing form 1.5 percent to 8 percent, or $900,000. That hike makes the firm unprofitable and Cardella doesn’t want to pass it on to the customer as the government recommends. Instead the firm will freeze wages and benefits and slash corporate salaries.

A peculiar argument currently being circulated is that the federal-state unemployment program is stimulating the economy, and unbelievably, creating jobs. Rep. Pelosi made this claim. And it has been echoed by opinion-makers.

Read Thomas Cardella’s op-ed in today’s Press-Citizen refuting it.