Schumer calls for end to business tax

GLENS FALLS, N.Y. -- Sen. Charles Schumer on Wednesday called for the so-called Super Committee crafting a deficit reduction plan to end a new tax that businesses have to pay to finance interest on New York Unemployment Fund loans from the federal government.

"So today I am announcing a campaign to get it repealed," Schumer (D-N.Y.) said during remarks at the end of a tour of infrastructure improvement work on South Street.

Schumer says he wants the repeal to be retroactive, so that employers receive a refund of the $20-per-employee tax that went into effect this month.

"So if you're a small business, it's going to cost you a little bit. If you're a large business it's going to cost you a little more," he said.

As part of the American Recovery and Reinvestment Act, better known as the economic stimulus plan, states were allowed to borrow money, temporarily-interest free, from the Federal Unemployment Trust Fund, to help finance unemployment benefits during the recession.

"Unemployment was going up like a rocket, unfortunately . . . And so New York State didn't really have the funds to pay unemployment insurance," Schumer said.

The interest-free provision is now expiring, and the state is passing along the interest costs to employers.