State Rep. Mike Veon (D-14) Proposes New Tax on Employers and Workers

This page was last updated on July 7, 2005.

Veon proposes providing up to 12 weeks paid leave for workers caring for family members; Commonwealth Rep. Mike Veon (D-14); May 4, 2005.

In summary, we have another Democrat proposal to place another ball and chain around the feet of Pennsylvania businesses and workers. As with all of these anti-business and anti-worker proposals, we hear it’s for their own good.

I sent an e-mail note – shown at the bottom of this critique – to Mr. Veon asking some questions. After nearly two months, Mr. Veon still has not replied. The is only the latest example of a trend showing politicians don’t like to answer questions.

Mr. Veon’s proposal is in House Bill 1459 (session of 2005). It should come as no surprise that local reps. LaGrotta and Levdansky introduced the bill along with Mr. Veon.

“HARRISBURG, May 4 – State Rep. Mike Veon announced the introduction of legislation that would provide paid leave for people forced to take time off from work to care for an ill or injured family member.

“Veon’s proposal – the Family Temporary Care Insurance Act -- corrects a flaw in the 1993 Family Medical Leave Act, which allows workers to take up to 12 weeks to care for a loved one, but makes no provisions for paid leave.

“‘Studies have shown that many people have needed to use family leave to care for an ill or injured loved one, but simply couldn’t afford to miss a paycheck and take the needed time off,’ Veon said. ‘My proposal would fix this problem, providing paid leave without using one single tax dollar.”

[RWC] If you didn’t already know it, two paragraphs down you will find the “no tax dollars” claim is false.

“‘As it stands now, most Pennsylvanians are presented with a perilous choice: take time to care for a seriously ill family member or new child, or face financial ruin. This should not be.’”

[RWC] If there is such a large market, why aren’t insurance companies already offering policies to individuals? If they do, what’s the purpose of the bill?

“Veon said his proposal would use a shared employee/employer contribution of approximately $24 annually, or $2 a month per worker.”

[RWC] I thought this plan would provide “paid leave without using one single tax dollar.” If this is not a tax, it would be interesting to know what Mr. Veon considers a tax. I suspect Mr. Veon would like us to believe his new tax is really an insurance premium.

Below are the two questions I asked Mr. Veon about this paragraph.

“First, your press release talks about an employee/employer ‘contribution.’ I could be mistaken, but I think most people believe contributing implies a voluntary act, as in I contribute to my VFD. Is the program voluntary? That is, can workers choose not to have the so-called ‘employee/employer contribution’ taken from their gross compensation?

“Second, your press release talks about a $24/year employee tax, but the bill includes no specific tax rate and says the rate will be determined year-to-year by the Secretary of Labor and Industry. When taxes are levied or increased, I believe they should be enacted by a voter referendum. Barring that, taxes and/or their increases should be enacted by elected representatives, not unelected bureaucrats and/or political appointees. Why doesn’t your bill require proposed tax increases to receive approval from the General Assembly and the governor?”

As noted above, I received no reply to my questions.

“‘In exchange for this, employees will be able to draw an emergency medical benefit comparable to existing state unemployment compensation. I believe that this legislation will allow Pennsylvanians to truly ‘put families first.’

“‘As we approach Mother’s Day this weekend, we need to think about the parents who must take off time to care for a sick child, or the grown child who needs time to care for an ailing parent. My bill would give these people the financial peace of mind they need,’ Veon said.

“The proposal is based on existing California law, and similar bills are currently pending in 28 other states including New York, New Jersey, Connecticut, Massachusetts, and Maryland.”

[RWC] A question my parents used to ask me seems appropriate here. “If your friends jumped off a building, would you follow them?”

“‘Providing this paid leave is good for families, good for workers, and good for business,’ Veon said. ‘In fact, allowing this kind of leave ends up helping businesses to recruit and retain top-flight employees who recognize the value of benefits like this.’”

[RWC] Did you ever notice how career politicians always seem to know better than business and workers what is good for business and workers? If this is such an awesome idea, why didn’t businesses do it themselves a long time ago?

Below is the question I asked Mr. Veon about this paragraph.

“Third, you stated, ‘this kind of leave ends up helping businesses to recruit and retain top-flight employees who recognize the value of benefits like this.’ Can you provide the source of this information? I ask because businesses tend to do what’s in their best interest without government prodding, especially when it’s as cheap as your press release alleges.”

As noted above, I received no reply to this question.

“Veon cited studies from California that outline the impact of their law on businesses:

· In 84% of covered establishments, the FMLA has either no effect or has a positive effect on productivity;

· In 90% of covered establishments, the FMLA has either no effect or has a positive effect on profitability and growth;

· 89% of covered establishments experience either no increase or only a small increase in administrative costs and continuing benefits – such as health plans -- during leave;

· 93% of covered establishments experience either no increase or only a small increase in hiring and training costs;

· In 89% of covered establishments, the FMLA has a neutral or positive effect on employee morale;

· 98% of covered and eligible employees return to work for the same employer after taking leave for family and medical reasons.”

[RWC] I asked Mr. Veon to provide web links to the alleged California studies he cited, but after nearly two months Mr. Veon still has not replied.

“‘The facts are clear,’ Veon said. ‘While the Family Medical Leave Act was a good idea, this proposal makes it a viable choice for workers who want to care for family members without leaving their jobs and a viable choice for employers who want to do more to help workers stay on the job.’

“Veon was joined by representatives of the Philadelphia Citizens for Children and Youth and Pathways Pennsylvania – groups that help families cope with long-term health emergencies.

“Veon’s bill has been referred to the House Insurance Committee for consideration.”

[RWC] Below is the question I asked about the program’s administration cost.

“Fourth, how much of the tax would go to program administration? The bill only says ‘Initial and ongoing administrative costs associated with the family temporary care insurance program shall be payable from the Temporary Care Fund.’”

As noted above, I received no reply to my questions.

Dear Mr. Veon,

Please answer the following questions I have about your proposal & press release.

First, your press release talks about an employee/employer "contribution." I could be mistaken, but I think most people believe contributing implies a voluntary act, as in I contribute to my VFD. Is the program voluntary? That is, can workers choose not to have the so-called "employee/employer contribution" taken from their gross compensation?

Second, your press release talks about a $24/year employee tax, but the bill includes no specific tax rate and says the rate will be determined year-to-year by the Secretary of Labor and Industry. When taxes are levied or increased, I believe they should be enacted by a voter referendum. Barring that, taxes and/or their increases should be enacted by elected representatives, not unelected bureaucrats and/or political appointees. Why doesn't your bill require proposed tax increases to receive approval from the General Assembly and the governor?

Third, you stated, "this kind of leave ends up helping businesses to recruit and retain top-flight employees who recognize the value of benefits like this." Can you provide the source of this information? I ask because businesses tend to do what's in their best interest without government prodding, especially when it's as cheap as your press release alleges.

Fourth, how much of the tax would go to program administration? The bill only says "Initial and ongoing administrative costs associated with the family temporary care insurance program shall be payable from the Temporary Care Fund."

The last "question" is a request for you to provide web links to the alleged "studies from California that outline the impact of their law on businesses" you cited.