California Defaults on Federal Covid Loan to Pay for Illegals;
State Shellacks Business Owners With 50% Increase in Payroll Taxes (for Years and Years) To Pay the Loan Back
Plus: The Rise of the ASE (Anti-Search Engine)

Unrelated: The sentencing hearing in the Alvin Bragg persecution has been cancelled, and the judge has given leave for Trump to file a motion to dismiss charges. They can't jail a man that the public has chosen to be their president -- it's a rule.

I don't know if dismissing charges is the right move. If they're dismissed with prejudice, that means they're dismissed forever. If they're dismissed without prejudice, that allows Bragg to re-file, that means Bragg (if he doesn't get booted out of office) can re-file them when Trump is out of office.

Obviously the corrupt regime operative Merchan will attempt to dismiss without prejudice.

I want them to appeal and have the court obliterate the charges. Maybe Trump can still do that if the charges are dismissed with leave to re-file.

I dunno -- lawyers, once a verdict is reached, if the charges are dismissed without prejudice, can you still appeal the charges? Or will an appeals court say the appeal is moot?

Or does double jeopardy attach after any dismissal? I'm out of my depth!

Back to the actual headline story:

Kicking out the illegals will destroy our economy.

Who will pick our crops?

Now they're jacking up payroll taxes on businesses by 50%, next year it will be 100%, the year after that, 150%. And on and on, until the loan is repaid.

Chef Andrew Gruel @ChefGruel

We just ran payroll. The payroll taxes were 2K higher than calculated. We called the payroll company. They explained (in summary) that California has a budget shortfall, and the federal government wants money back that it lent California for UI that it "lost." They are making up for it by having business owners pay it. Keep in mind that it was around 10% of our total payroll. When people say, "Why isn't California business-friendly?" remember this.

Everything for illegal aliens, nothing for citizens except burdens and victimization.

The Hoover Institute wrote about this last year -- but it's only this year that business owners are getting hit with the shock of tens of thousands of additional taxes owed.

Little did California businesses know that they were cosigners on the state's nearly $20 billion loan from the federal government that was used to cover California's unemployment fund shortfall during the COVID pandemic. This ugly truth became apparent when the state recently decided to stop making payments on this loan. When a state defaults on its federal unemployment insurance loan, federal law requires that the state's businesses repay the loan.

What makes this default even more egregious is that the stone-age-era IT system of the state's Employment and Development Department (EDD) opened the floodgates to bad actors, permitting more than $30 billion in fraudulent unemployment claims during the pandemic. Those receiving fraudulent payments include incarcerated felons, a person impersonating a one-year-old, and a person impersonating Senator Dianne Feinstein. A single residential address received checks for around 60 separate individuals filing from that address.

This could have been avoided with a competent EDD. But this department's performance has been deficient for decades, and California businesses, many of which are struggling, are left paying for blatant and costly mistakes that should and could have been solved years ago.

With an unpaid federal unemployment insurance loan, the federal government raises the unemployment insurance tax immediately by 0.3 percent on each business within the state, and an additional 0.3 percent each year after that until the loan is fully repaid. The normal federal unemployment insurance tax rate is 0.6 percent per year, which means that California businesses will be paying several multiples of the normal federal tax rate before the loan is retired.

The state's Legislative Analyst Office predicts that repaying the loan through higher taxes on businesses is not expected until 2029 or 2030 and note that retiring the debt could take longer, depending on the state's economic performance. A recession would almost certainly delay repayment, and the odds of a recession in the next seven years are significant.

The state's decision to default is inexcusable. California recorded a nearly $100 billion state budget surplus last year, thanks to the state's top earners, that could have been used to repay the debt. The state received $27 billion in federal COVID aid it could have used to repay the debt. The state's record $300 billion--plus 2022--23 budget could have retired the debt. Even after defaulting, the state could have resumed its payments this year and offset the tax burden on businesses, as it planned to do in its 2023--24 budget. But as the state's finances continue to decline, the state has walked back making payments or offsetting higher business federal unemployment insurance taxes.

Twenty-two states received federal unemployment loans during the pandemic, and California is just one of four states that have not yet repaid the debt. As of the end of last year, California owed nearly two-thirds of the outstanding $27.5 billion federal unemployment insurance debt among these four states. The other states with remaining unpaid debt are New York, Illinois, and Connecticut, all of which are high-tax and high-spending states that are all losing population to other states. I will let you draw your own inferences about why people are leaving California and these other three states and moving to states with lower taxes, fewer regulations, more economic freedom, and lower living costs.

...

How did state government respond to this fiasco? In July 2020, Governor Newsom appointed a "strike force" to evaluate the EDD. By September 2020, Beverly Hills police arrested individuals who were buying expensive clothing, jewelry, and cars using EDD debit cards, which electronically provide unemployment benefits. Those arrested showed the police how easy it was to obtain these cards. Rapper Nuke Bizzle penned a song about the ease of committing EDD fraud that goes like this: "I done got rich off EDD. . . . I just might swipe me a lump sum. I'm in Dior havin' money fun. . . . Ten cards, I'm swiping 10K a day. Counting up bills like a CPA."

...

Even after all this, the EDD can't identify all the fraud that occurred. The EDD estimated about $20 billion in fraud, but Lexis-Nexis, an independent data and analytics firm, reports the fraud is approximately $32.6 billion.

In addition to just giving away billions in fraudulent payments -- which California doesn't seem to mind, because the state is pro-criminal -- they also spent huge sums on paying for free health care for illegal aliens.

For some definitions of "free." Business owners do not consider this "free."

More than 700,000 immigrants living illegally in California will gain access to free health care starting Monday under one of the state's most ambitious coverage expansions in a decade.

It's an effort that will eventually cost the state about $3.1 billion per year and inches California closer to Democrats' goal of providing universal health care to its roughly 39 million residents.

Democratic Gov. Gavin Newsom and lawmakers agreed in 2022 to provide health care access to all low-income adults regardless of their immigration status through the state's Medicaid program, known as Medi-Cal.

California is the most populous state to guarantee such coverage, though Oregon began doing so in July.

Newsom looked at the huge federal loan intended to help citizens of California stay alive while in forced unemployment due to state-mandated lockdowns, and said, say, I'll just embezzle this money for my illegal alien voter friends!

Gov. Gavin Newsom said today the state is partnering with philanthropic groups to provide disaster relief to undocumented immigrants affected by the coronavirus who have been left out of other pandemic assistance programs.

Ten percent of California's workforce is undocumented, Newsom said, and they are not eligible for unemployment insurance or aid through the federal stimulus package. The new $125 million Disaster Relief Fund will include $75 million in taxpayer funds and $50 million in philanthropic contributions to help undocumented workers affected by coronavirus secure a one-time payment of up to $500 per person or $1,000 per household.

"We feel a deep sense of gratitude for people who are in fear of deportation but are still addressing the essential needs of tens of millions of Californians," Newsom said, pointing out that many work in essential sectors like health care, agriculture, food, manufacturing and construction.

...

The state also recently allowed for "presumptive eligibility" in its Medi-Cal program, allowing anyone who is uninsured, including undocumented people, to be tested and treated for COVID-19. The eligibility also means they can be treated in a health center or community clinic instead of a hospital emergency room, Newsom said.

A friend summarizes:

Instead of using the Fed loan for what it was for (unemployment benefits during COVID), Newsom instead misappropriated it to cover fully cover illegal immigrant health care. And now that they have to pay it back, California is bilking business owners with massive increases in payroll taxes

BTW, it's hard to google this connection, because the Google algorithm hides every article talking about the expenses caused by illegal immigration, and instead spams dozens of propaganda articles posted by the state of California telling you how much money illegal aliens pay in taxes. Try it yourself. Google has decided you're not allowed to know about the costs of illegal immigration, only the sweet, sweet benefits. We're all living on easy street now, cuz!

I had to ask my friend to check his X account to find this article, because Google is now an Anti-Search Engine. It blocks you from seeing the articles you want, and instead pushes articles Google demands you accept as "truth."

posted by Ace at 02:10 PM

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