Don Miller, owner of Creative Impressions in Virginia, is worried about paying higher unemployment taxes when his business is down. 
 
 UNEMPLOYMENT TAXES UNEMPLOYMENT TAXES Thirty-six states have increased the annual tax businesses pay to finance unemployment benefits. 
 
 State Average tax 
 
 per worker Change Ala. $267 124% Alaska $447 19% Ariz. No change Ark. $300 16% Calif. No change Colo. $236 45% Conn. No change Del. No change D.C. No change Fla. $312 200% Ga. $213 48% Hawaii $1,070 1089% Idaho $816 134% Ill. $323 7% Ind. $385 79% Iowa $468 23% Kan. $350 116% Ky. No change La. $111 14% Maine $328 74% Md. $422 159% Mass. Varies Widely Varies Widely Mich. $21 surcharge per employee Minn. $450 14% Miss. No change Mo. No change Mont. $482 72% Neb. $300 165% Nev. No change N.H. $332 71% N.J. $896 57% N.M. No change N.Y. $349 9% N.C. No change N.D. $333 36% Ohio $270 2% Okla. No change Ore. $646 49% Pa. $432 13% R.I. $675 7% S.C. No change S.D. $227 191% Tenn. $293 49% Texas $165 85% Utah No change Vt. $329 38% Va. $171 78% Wash. No change W.Va. $348 61% Wis. $384 23% Wyo. $581 69% Sources: U.S. Labor Department and state workforce agencies MORE FROM PROPUBLICA MORE FROM PROPUBLICA See an interactive chart on the health of your state's unemployment insurance trust fund and how it affects you at propublica.org/unemployment. Payroll taxes increase for many employers across USA NORFOLK, Va.  Last year was the worst Don Miller had seen in more than 20 years of running a graphic printing business here. Business slumped 15%, and he had to lay off two of the three workers who helped him print stickers and signs for Navy ships. Miller hopes to bring them back, but hiring will be more expensive for all Virginia business owners this year. The recession has emptied Virginia's unemployment insurance trust fund, and the state is making up for it by raising taxes on employers and cutting jobless benefits for seniors. In 2009, the average business owner paid $95 per employee. This year, the tax will be $171, according to estimates by the state workforce agency. "It's another added expense to hiring somebody," Miller says. "Everything's going up, and business is going down." Similar tax increases are hitting employers nationwide this year as states struggle to pay the 5.5 million Americans currently collecting state jobless benefits. So far, high unemployment and, in many cases, poor planning have prompted 25 states to borrow more than $25 billion from the federal government to keep benefit checks in the mail. In other states, unemployment compensation funds are still in the black, but reserves are rapidly dwindling. Nine more states likely will be borrowing by mid-year, according to a ProPublica analysis of state revenue and benefits. Tax on businesses Business owners in 36 states face tax increases ranging from a few dollars to nearly $1,000 per worker. Six states are scaling back or freezing benefits for the unemployed: • Jobless Pennsylvania workers will get 2.3% less in benefits starting this month, while the average tax this year for businesses will increase to $432 from $384 per worker. • Hawaii's employers face an average increase to $1,070 from $90 per worker. The state also proposes decreasing the maximum benefit by as much as a third — about $190 per week. • Texas, where the trust fund is $1.4 billion in the red, has increased the average tax on employers to about $165 from $89 per worker. Instead of fulfilling the unemployment insurance system's purpose of stimulating the economy, these measures may contribute to joblessness, says Gary Burtless, an economist who studies labor policy at the Brookings Institution, a think tank. "We don't want to pick this moment of all moments to boost taxes on employers," Burtless says. "We want to encourage employers as much as possible to add to their payrolls." Workers are being hurt in another way — through benefit cuts. In Roanoke, Va., James Hay, 70, received a letter from the state informing him that his monthly unemploymentbenefits are being cut to $100 from about $800 because state law limits payments to Social Security recipients when the state's fund runs low. "I was devastated when I read it," Hay says. "I thought, 'Lord, what am I going to buy heating oil with this winter?' " Like many other seniors, Hay was working full time to supplement his $1,400 monthly Social Security check, which he says was not enough to support him, his granddaughter and her two young children. Then the asphalt factory laid him off. Unemployment insurance made up for some of the lost income, but now Hay is not sure how his family will get by. "We'll just have to do whatever we can do," he says. "I hope and pray we'll be all right." States borrow heavily The state hopes to save about $11 million through the cuts to seniors but anticipates borrowing $1.3 billion to replenish its unemployment fund before the recession ends. "The middle of a recession is when people need help most," says Maurice Emsellem, policy co-director of the National Employment Law Project, an advocacy group for low-wage workers. Cutting unemployment benefits, he says, "undermines the fundamental goals of the program — boosting the economy and keeping people out of poverty in an economic downturn." Many states such as Virginia are already at or near the highest payroll tax rates allowed by law, and others have pushed politically difficult tax increases through their legislatures, making further benefit cuts likely if high unemployment persists, says Rich Hobbie, executive director of the National Association of State Workforce Agencies. Some of the pain might have been avoidable. Long before the recession began, Virginia and many other states that have imposed tax increases or benefit cuts let their trust funds dwindle well below the 18 months of reserves the U.S. Labor Department recommends. Virginia had to slow down federal borrowing despite the impact on businesses and seniors, says Republican state Sen. John Watkins, chairman of the Virginia Commission for the Unemployment Insurance Trust Fund. "I have angst for people who are unemployed," he says. "But our trust fund is busted — it's gone." Pierce reports for ProPublica, an independent, non-profit newsroom based in New York. USA TODAY editors worked with her in preparing this story for publication. Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more ||||| To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot. 
 
 Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends. 
 
 Photo 
 
 I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation. 
 
 Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent. 
 
 The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.) 
 
 Newsletter Sign Up Continue reading the main story Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. You must select a newsletter to subscribe to. Sign Up You agree to receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. View all New York Times newsletters. 
 
 I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering. 
 
 Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality. 
 
 Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get. 
 
 But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate. 
 
 Advertisement Continue reading the main story 
 
 My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
– Massive unemployment is putting a strain on state benefit funds, and states in turn are trying to recoup the money by raising taxes on employers. In all, 36 states have raised payroll taxes, a strategy that critics say will backfire by putting a crimp on hiring. “Everything’s going up, and business is going down,” one Virginia employer tells USA Today. In that state, taxes have gone up from $95 per employee in 2009 to $171 in 2010. The increases range from a few dollars in some states to nearly $1,000 per worker in Hawaii. "We don't want to pick this moment of all moments to boost taxes on employers," says an economist at the Brookings Institution. "We want to encourage employers as much as possible to add to their payrolls." Times are tough, however: Twenty-five states have borrowed a total of $25 billion from the federal government to keep up with jobless benefits, and another nine will be in the red by mid-year, reports ProPublica.