Tax hike on California employers spurs plea for help to cover Gavin Newsom’s ‘failures’
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By Josh Koehn
Published on May 9, 2026.
State Senator Brian Jones has urged Congress to suspend looming federal payroll tax increases tied to California's unpaid unemployment insurance (UI) debt. The state's employers will soon pay a 5.2% payroll tax, which is nearly nine times higher than those in other states that are debt-free. Jones argues that businesses are being forced to pay for California's $20 billion debt, which has been refused by Governor Gavin Newsom and Democratic lawmakers. He also criticizes the state's Employment Development Department for paying out billions of dollars in fraudulent unemployment claims while real businesses were forced to remain shuttered. Jones' measure asks Congress to stop raising federal unemployment taxes on businesses when a state's own actions, like forcing shutdowns during COVID-19 or failing to prevent unemployment fraud, caused the debt.
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