Despite the Inslee administration’s claims, it has become clear that Washington businesses should expect an increase in their unemployment insurance (UI) taxes that will add up to $800M in 2021, with additional increases likely in store in 2022 and 2023.

Economists at the National Federation of Independent Businesses (NFIB) attribute the UI shortfall to the lockdowns implemented in response to the coronavirus pandemic.

The increase is primarily the result of the social tax aspect of UI, which is assessed on all employers to make up for companies that have folded and are no longer contributing to the fund. In 2021, those business closures will be significant, resulting in the social tax increasing from the .25% minimum to the 2.11% maximum. Experts expect the UI tax to triple in 2022.

The Whatcom Business Alliance (WBA) is joining several business advocacy groups across the state in calling for the Inslee administration to use CARES Act funding to shore up the fund and avoid raising business taxes until all Whatcom County businesses can be fully operational and have adequate time to rebound from the administration’s ongoing and indefinite restrictions.

“Asking businesses to shoulder a higher tax burden will accomplish one thing, and one thing only: It will ensure small businesses across our county close their doors for good,” said Barbara Chase, WBA Executive Director. “While health and safety remain our number one priority, the mix of ongoing economic restrictions and massive tax increases will cause Whatcom County and the state of Washington’s business community to enter a downward spiral they will never recover from.”

The tax increases also create significant health risks for Whatcom County families.

“If health and safety truly is the number one priority of the Inslee Administration, then putting tens of thousands of people out of work should be avoided at all costs. Economists, sociologists, and public health experts have shown time and again that increases in the unemployment rate lead directly to negative health outcomes, including the loss of life,” Chase said. “Closing businesses by crushing them under the weight of a significant tax burden and prioritizing health and safety cannot coexist. This administration needs to find a better way.”

The WBA strongly encourages members and the local business community to contact their state representatives and the Governor’s office to oppose increases in business taxes until the economy has reached prior levels of prosperity.

If you do not know your state representative, you can find that information by clicking here.

You can find your state senator by clicking here.

You can learn how to contact the Governor’s office by clicking here.

To follow the WBA’s advocacy efforts, please visit our website or follow us on Facebook or LinkedIn.