Increased unemployment taxes drive business away

By Thomas Cardella

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I recently saw Speaker of the House Nancy Pelosi and others state that increased taxes and increased unemployment taxes benefit the economy of the country. I would like to give readers a perspective from a business owner's point of view.

Thomas L. Cardella & Associates was recently notified by the state of Iowa that our unemployment taxes will be going up by $900,000 (from a rate of 1.5 percent to 8 percent) in 2011.

This caused us to re-evaluate our three-year plan and to not add 700 new jobs (500 in Cedar Rapids, 100 in Grinnell and 100 in Cedar Falls) in Iowa but to move those new jobs to Texas.

These 700 jobs would have represented more than $18 million in payroll and would have helped to revitalize the flooded downtown Cedar Rapids area, as well as brought additional revenue to the other communities.

Instead, our company has made a decision to continue its growth in another state with a more favorable business climate. The reason is very simple.

In order for Cardella & Associates to remain profitable and grow, we must remain competitive in the global call center industry. We cannot pass on these increased costs to our clients, as they would simply take their work and jobs to another company.

As far as our current 800 jobs in the state, we will continue to maintain that Iowa work force. But it is upsetting and frustrating to not be able to expand our business in Iowa. The policies of the state make it prohibitive for us to do so.

Is unemployment insurance needed and necessary? The answer is clearly yes.

But the fact of the matter is that we offer dozens of people jobs each week, and even though they make less by being on unemployment, they would rather collect an easy check than return to work.

In addition, we attempt to set up interviews for dozens of others who have applied but who never return our calls. Why? Because unlike our neighbors in Nebraska, Iowa does not have a system to report people who turn down jobs or who refuse the interview.

We can continue to increase the tax burden on Iowa businesses, but that will only create higher unemployment as companies leave the state.

Thomas L. Cardella of Solon is CEO of Thomas L. Cardella & Associates, a customer contact company with corporate offices in Cedar Rapids. Comments: Thomas.Cardella@TLCAssociates.com