evenue raised by the FUTA tax is designated for the administration of UI and the maintenance of a system of ES offices. Portions of FUTA revenues also fund the federal half of the Extended Benefits Program (Department of Labor 2-5).
The state unemployment insurance tax varies from state to state, is paid by employers on behalf of their employees, and is experience-rated (employers with few layoffs typically have the lowest tax rates). State legislatures determine the tax rate and the taxable wage base. Twelve states limit taxable wages to the federal minimum of $7,000; others have ceilings ranging from $8,000 (eight states) to $25,500 (Hawaii).
State UI tax revenues fund weekly UI benefit payments and the state's half of the Extended Benefits Program. FUTA revenues are deposited in three federal accounts, and state UI tax revenues are deposited in 53 state accounts maintained by the federal government (one for each state, the District of Columbia, Puerto Rico, and the Virgin Islands). It is projected that, at the end of fiscal year 1997
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