system
Given the following post, respond as if you're commenting on Reddit:
human
CMV: Unemployment Income should not be taxed in the US.

Unemployment income should not be taxed as income in the US, and here is why.

1. To qualify for unemployment, you have to be working and therefore most likely payed into the unemployment pool and to be taxed when you are already down feels like double dipping into the pockets of hurting Americans. 

2. If you receive a child dividend or a stimulus check or a portion of social security, it is not taxed as income because the idea is that the income is suppose to offset natural expenses such as having a child which is good for the economy or the idea that you are retired and payed your dues. Unemployment dips into both those categories. Taking care of those at a loss of employment helps cover the cost and also understands that most people have been paying into unemployment for sometime and it is due to them. 

3. Self-employed people working at home when they don't make a profit can count expenses such as a portion of their  mortgage, utilities, etc. as an expense and generally write off the expenses to offset future profit. Shouldn't unemployment have that same option to say "Hey I am trying to apply for a job, but I still have a home, utilities, etc. And in no way making a profit. My expenses offset my profit from unemployment, therefore taxing doesn't make sense when I am working at a loss. 

4. The budget could easily be more than satisfied by taxing the wealth of those at the winning end instead of the losing end. Removing corporate tax breaks, local and state tax breaks, Increasing tax on things such as dividends or a wealth tax easily would bring in more income than taxing the unemployed. Meanwhile economic evidence shows that unemployed people will reinvest their income back into the economy compared to things such as dividend profits. 


Change my mind!
gpt
Taxing unemployment makes sense for the same reason that taxing the wages of government employees makes sense. In a sense, it's silly -- the government gives you money and then asks for a percentage of it back.  It's convoluted and rather pointless.  At first glance, it would make more sense just to reduce the amount paid out initially, but that's actually less fair.

Everyone is in a different overall position.  Two people who receive the same government salary or the same unemployment benefits might be in totally different overall positions despite the identical wage/benefit.  Maybe one of them owns a business on the side or has a spouse making high six figures.  Giving them the benefit and then taxing back a percentage of it ensures that the person who needs it more ends up with a larger benefit (i.e., the person with the outside income will pay a much higher tax rate and end up retaining a smaller proportion of the unemployment pay out).  You could do the same thing up front by changing the size of the payment, but that would involve a lot of complicated paperwork when you can accomplish the same purpose later on when everyone files tax returns (which they have to do anyway).