The taxable wage base is a payroll tax on employers to fund unemployment insurance. New Jersey’s is $33,500, almost five-times more than the federal. Cutting the wage base in half would reduce the burden of paying so much UI payroll tax and increase regional business competitiveness. Pennsylvania’s is only $9,500; Delaware’s is $18,500; and New York’s is $10,700.
The goal is to lower taxes for businesses and make the state more regionally competitive. Small businesses stand to benefit from this simple change.
The unemployment insurance fund has a balance of $1.8 billion, enabling a $380 million tax cut in 2016. The fund should stay in the back with Governor Christie’s cost-saving measures being implemented, assuming it isn’t raided to fund other programs. With the surplus, there is ample opportunity to make these simple chances to improve New Jersey’s business environment while maintaining support for the unemployed and those in hardship.