Texas stops unemployment collections

Your subject is a little misleading - the state of Texas has only stopped the extra .12% for replenishment. N Owen

Right. My bad. Still, a couple hundred mil in reduced taxes is more than chump-change.

And if you own a company in Michigan or California where unemployment taxes are significant, Texas, and other low-tax states, seem more attractive every day.

I see it as a way for a politician to claim they're "cutting" taxes when doing nothing of the sort. If the UI escrow accounts weren't at a surplus, this wouldn't be happening.

California annually adjusts the UI rates for employers depending on the status of the UI fund. No politician can claim they "cut taxes" when it gets adjusted down. Since UI taxable income is capped at $7,000, and the average tax-rate is in the 2% range, I hardly call an annual UI tax of less than $200 per employee significantly higher than other "low-tax" states.

I'd say there are a few more factors than some tax-beans as to where a business gets located. Texas is a wonderful place, but I'm not too worried about companies fleeing California all of a sudden over Perry's decree. Plus, you know that the replenishment charge will be tacked right back on when the UI fund gets depleted (which could happen a lot sooner than one thinks if the economy takes a big dump).

Yeah, I know. Still, as an employer, the prospect of paying nothing in UI for the balance of the year is nice.

I agree. And I don't expect a wholesale exodus from California to Texas or Florida (although there is significant movement from California to Nevada). Still, it would by Pollyanish of state functionaries to think that taxes are not part of the competitive atmosphere in attracting businesses.