Blogger Loses Unemployment Check Because of Ads 554
Techdirt is reporting that one unfortunate, unemployed New York lawyer recently had her unemployment benefits greatly reduced because of the incredible $1/day she was earning via ads on her blog. "The whole thing sounds like a bureaucratic nightmare, with NY State asking her to get a form from her new 'employer' who didn't exist. Then NY Department of Labor started giving her all sorts of contradicting information, and eventually an 'investigation' into her 'business' — during which time her unemployment benefits were stopped entirely. She's now pulled the Google AdSense from her blog (total earned over the life of the blog $238.75)."
nothing new (Score:5, Informative)
Back in 2000 I was denied unemployment benefits because I made the mistake of telling the interviewer I had tried to get some contract positions. Never mind that I DIDN'T GET THEM, simply the fact I was now "an independent contractor" meant I was employed.
Never tell them anything. No, woe si me; I'm unemployed and unemployable, I simply don't know what I am going to do...
Re:The state is correct (Score:5, Informative)
She reported herself. She was being a good person and reporting ALL income. The rare breed who'd probably pay local state tax on items purchased out of state.
From the Forbes article (it's linked from the linked article): When the check came in, Karin realized she had a legal obligation to disclose the income to New York State, even though doing so might reduce the weekly unemployment benefits she received.
Re:The state is correct (Score:4, Informative)
They didn't stop her checks. They merely reduced the payout to reflect her new "part time but not fully employed" status. Unfortunately rather than subtracting $1 each month they subtract a percentage - about 33% - off your check.
That's why she removed the ads, so she can go back to getting full checks instead of ~66% checks.
This is why we need Negative Income Tax (Score:3, Informative)
With unemployment and welfare folded into one smooth curve, there're no perverse incentives and we don't have to pay an army of bureaucrats and lawyers to figure out who doesn't deserve assistance.
Re:The state is correct (Score:2, Informative)
If one believed in this kind of "safety net", the obvious decision would be to cut some fraction of a dollar per earned dollar, until the benefit evaporated.
In this way, you'd have much less of the "ah, to hell with it, I'll stay unemployed" crap going on.
Oh, I knew a guy who'd work six months, get "fired" to go on unemployment six months, then back to work, whatever the minimum amount of time was to keep this up in perpetuity. He was rather proud of this. He was the foreman of my factory sweeping crew I worked on in summers during college.
Regardless of anything else, there are plenty of people for whom that level of subsistence is A-Ok. Any actual scientific studies to determine the percentage? Note: sob stories don't count.
Re:Slow news day (Score:4, Informative)
I base this off of my previous place of employement where we would have to collect Tax information for the independant contractors we paid over $600, but did not need to worry about those we paid less than $600 a year.
Re:nothing new (Score:5, Informative)
Yeah, I had something similar happen... in 2001 my side jobs ended, then my day job... because I had contract work, on my taxes, I was "self-employed"... not good. Considering I paid more in taxes in 2000-2001 than I earned in 2002-2005, I feel kind of ripped off.
Re:The state is correct (Score:1, Informative)
yes, speaking from experience, you are fucked. if they find out. which they will eventually it might take years but they will come back after you to try and recover the “unemployment funds you stole from them”.
good luck.
it is not the unemployment office’s job to find you work, it is their job to figure out how to stop giving you money any way possible and they have an unlimited number of excuses to not give you money.
this is why there are reports in some news of “the real unemployment rate is”
the only people the system really works for are the truly stupid and the truly dishonest.
disclaimer: i am ‘self-employed’, have been for 7+ years. i can’t put any money into unemployment insurance, which saves me a bit, but i will never get a dime out either no matter how unemployed i might be i will never be part of the statistics. i’m considered employed, no matter how much money i bleed, until i get a W-2 job and get laid off from it.
State tax reciprocal agreements (Score:4, Informative)
No. Actually taxes are based on both where you live and where you work. That is, you are subject to their income tax rules if you live OR work in the state. Most states have built into their tax codes methods to avoid double taxation between states. The majority of these are via a credit on the resident state tax return for taxes paid to the non-resident state. Or, in other words, the state where you WORK gets the tax money. So for example, if you were a resident of Colorado on a temporary assignment in Texas, you would pay Colorado income tax on that money, because there's no income tax from Texas to generate a credit. If you were a resident of Colorado on a temporary assignment in California, you would file a tax return for both California and Colorado. You would pay the California taxes, and then apply taxes paid to California as a credit on your Colorado return and end up not paying Colorado income tax (so long as California has equal or greater tax rates than Colorado, otherwise Colorado would take the difference.)
There are certain exceptions. For example a few states have reciprocal agreements. As you experienced, Pennsylvania and New Jersey have a reciprocal agreement. What that means is the states have an agreement not to tax each other's residents. So Pennsylvania residents that work in New Jersey will pay only Pennsylvania income tax and New Jersey residents that work in Pennsylvania will pay only New Jersey income tax. But this is the EXCEPTION not the RULE. In fact, Pennsylvania only has reciprocal agreements with 6 states (Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia) - had you worked in any other state with an income tax you would have paid income tax to the state you worked in. And the majority of states have no reciprocal agreements at all.
Re:The state is correct (Score:4, Informative)
That depends entirely on the particular state.
In Minnesota, you could turn around after that one-month temporary job and receive benefits from the first job (assuming you did not already exhaust them). Also, part-time work will reduce benefits dollar-for-dollar until you exceed 32 hours a week (or make more money from part-time work than you'd receive on unemployment).
As you point out, the real problem here is a system with idiotic rules, not her honesty in reporting $238.
Re:Slow news day (Score:3, Informative)
That was this guy's [oddtodd.com] argument was and he won his fight. Same state even.
Re:An unemployed LAWYER was perhaps.... (Score:3, Informative)
Re:The state is correct (Score:3, Informative)
You can save money no matter how much you make. Saying "I don't make enough to save" is bullshit. People who make under 20k per year. In most areas you can rent for around $500 per month - it may be a shithole but it's a place to live (in some areas $500 gets you a damn fine apartment). That's about $6k per year. You can eat well for about $20-25 per week if you buy the right foods, which ads up to around $1000 per year for food. If you wanted to live on ramen you could cut that down to under $250 per year, but I don't advise it, you'll be malnourished in short order. Give another $3000 per year for things like laundry, clothes (you ARE buying cheap walmart clothes instead of those designer jeans, right?) and other miscelaneous expenses, and you've got $10,000 per year that a person making $20,000 per year can save. Even with minimum wage you can still save $3k per year. Anybody can get a minimum wage job, even in this economy. Most anybody can manage a second, part time job as well.
The problem people have is they think "extras" are necessities. Cell phone? Luxury item. Car? Yeah, it's a luxury too. TV? Cable? Internet? All luxuries. Making more money only makes this problem worse, as people tend to buy more and more luxuries instead of saving the extra, like they should.
Back to the unemployment issue, what is really disturbing, is that the unemployment benefits are all or nothing. The fact that they don't care if your supplimental income doesn't come close to what even unemployment benifits provide is stupid, and isn't exactly a good way of encouraging someone to find a new job. This all or nothing nonsense needs to go. Just adjust the unemployment to take into account the supplimental income - adjusting it up until the supplimental income is greater than the unemployment benefit, at which point the benifit goes away entirely.
The fact is, if she was a high-paid lawyer before she lost her job, chances are she paid more in unemployment insurance while she was working than people making under $20k even made, and she deserves some of that back when she falls on hard times. Cutting her out for $1 per day is utter bullshit and you know it.
This attitude of "You're rich, you should support me" is exactly the attitude that keeps poor people poor (and getting poorer) and rich people rich (and getting richer). How about we take a little responsibility for ourselves, and do away with unemployment insurance altogether, huh?
Re:An unemployed LAWYER was perhaps.... (Score:1, Informative)
You mean "incredible." "Incredulous" means "unbelieving," while "incredible" means "unbelievable."
I know, I would have been more "with it" to quote Inigo Montoya, but then you might not have believed me.
Re:The state is correct (Score:2, Informative)
I have no problem with this lawyer drawing benefits, regardless of what her income might have been. And despite the common misconception, not all doctors and lawyers make a killing -- there was an article on CNN just the other day about an MD who makes more selling clothes on eBay ($120K) than their doctor's salary (<$120K), so she quit her doctor job to stay home with her kids and continue the eBay business. That may sound like a lot of money to some of you, but damned if I'd go through medical school, internship, years of residency, continuing education, ever increasing malpractice premiums, etc. for $120K a year.
So, everyone should be entitled to draw the benefits that were paid in on their behalf as long as they're attempting to find work. And in most states I'm aware of (or had unemployment experience in), you're allowed to look for work commensurate with your experience, position, and income levels while drawing your benefits. For example, computer programmers are not expected to choose between unemployment benefits and flipping burgers -- they're allowed to hold out for a similar job in the computer field, as long as they demonstrate that they're actively seeking such work. Along the same lines, in many states, you also draw benefits that are proportional to your former salary (and thus proportional to the taxes paid to fund your benefits), so everyone doesn't draw the same amount.
The trick is, if you do decide to take that McD's job (or mow lawns, or consult, or whatever) to try and get closer to your customary income level, then that constitutes employment and now you've given up your unemployment benefits, and my not be able to re-qualify if you voluntarily cease that employment. So if you intend to draw benefits, don't do ANYTHING that would constitute income, no matter how minor.
Re:Not so fast, says the IRS... (Score:3, Informative)
Assholes (Score:5, Informative)
I call this the law of Assholes.
Assholes ruin everything for everyone else. They go searching for ways to be just annoying enough to be an "asshole" but take great care and diligence to make sure that they don't run afoul of any rules/laws that might be in place.
It doesn't matter where you draw the rules/laws, they are assholes, and will always exploit the current version to perfection.
Then, somebody comes along and says "There ought to be a law" because of some asshole somewhere. There is no cure for assholes, because they will always exist. And passing ridiculous rules/laws to prevent them from being assholes is stupid as it is pointless.
I know one asshole, when confronted about being an asshole ("you're ruining it for everyone else"), said "I don't care, I'm just playing by the rules". And when the rules changed because of the asshole, it diminishes us all. They don't care about "everyone else" which is why they are assholes.
They just need to have their asses kicked.
Re:...imagine them in charge of your HMO (Score:3, Informative)
Yes, if they're allowed to compete with others offering similar services. It's when they don't have competition that it isn't optimal. So, allow them to compete across statea lines, and watch what happens.
Re:This is why we need Negative Income Tax (Score:3, Informative)
Or a "basic income", which is related:
http://en.wikipedia.org/wiki/Basic_income [wikipedia.org]