Subject: Taxes on Unemployment Compensation Comment: Another side note... it makes no sense for government transfer payments such as Unemployment Compensation to then later be taxed as income. Why not just reduce the amount of the benefit by an acceptable rate - say 15-20% - and then make it tax free? Why create additional reporting and recordkeeping burdens to collect taxes on money that was disbursed from the government in the first place? That is not very efficient. |