BUSINESS

Reviewed by Ebony Howard
Fact checked by Michael Rosenston

President Donald Trump signed the Executive Order “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster” during his first term on Aug. 8, 2020. The order allowed employers to defer the employee portion of Social Security payroll taxes for certain individuals in the final four months of 2020. The intention behind the order was to provide additional relief for employees working through the coronavirus pandemic.

The Internal Revenue Service (IRS) issued Notice 2020-65 on Aug. 28, 2020 which provided additional guidance for employers on the implementation of the Executive Order.

According to the Presidential Memorandum, Trump directed “the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.”

Key Takeaways

• President Trump’s payroll tax Executive Order allowed employers to defer the employee portion of Social Security taxes for certain individuals in the last four months of 2020.
• The action was taken to forestall hardship during the COVID-19 pandemic.
• The order applied only to the employee portion of Social Security payroll taxes.
• The postponed taxes were those that would have been payable from Sept. 1 through Dec. 31, 2020.
• They had to be paid in 2021, however.

Who Was Covered?

“The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods,” according to the Presidential Memorandum. This equated to an approximate $104,000-a-year salary: $4,000 biweekly * 26 pay periods per year.

IRS Notice 2020-65 further clarified that the determination of total wages was made on a pay-period-by-pay-period basis. This may have disqualified the same employee in certain pay periods based on overtime wages or other bonus pay. The $4,000 threshold was also recalculated as an “equivalent amount with respect to other pay periods” if an employer paid wages on a basis other than biweekly.

Which Taxes Were Deferred?

The Executive Order applied only to the employee portion of Social Security payroll taxes (6.2%).

Employee Medicare payroll taxes (1.45%), employer Medicare payroll taxes, (1.45%) and the employer portion of Social Security payroll taxes (6.2%) weren’t included in the Executive Order. The deferral didn’t apply to the parallel Social Security taxes owed by self-employed individuals via self-employment taxes.

When Was the Effective Date?

The employee portion of Social Security payroll taxes on wages that were paid from Sept. 1 through Dec. 31, 2020 were allowed to be deferred without incurring any penalties, interest, additional amounts, or addition to the tax. Employers who deferred these taxes wouldn’t withhold the funds or pay the taxes to the IRS as typically scheduled.

The deferred taxes were postponed until Jan. 1 to April 30, 2021. Interest, penalties, and additions to tax began “to accrue on May 1, 2021, with respect to any unpaid applicable taxes,” according to the supplemental detail in IRS Notice 2020-65.

Was It Optional or Mandatory?

This guidance was optional for private-sector employers and it was likely that the administrative costs would be a deterrent for many small businesses. It takes time to process changes in a payroll system and there was additional manual tracking required to ensure that specific situations were accounted for correctly.

The federal government, the United States’ largest employer, deferred employees’ portions of their Social Security taxes to provide immediate relief during the pandemic. There was no option to opt out for federal employees. The plan was to implement these deferrals as of the second pay period in September. This included all branches of the military as well as civilian jobs with the federal government.

Important

The Executive Order was written as a deferral. Payroll taxes that were deferred by an employer would be due at a future date.

The deferred taxes from September to December 2020 would be taken out in January through to April 2021, posing specific risks to anyone planning on or forced to change jobs during that time frame. Employer A might have deferred the employee portion of your Social Security taxes. You could run into some issues because the deferred taxes weren’t able to be withheld from your paychecks from January to April 2021 if you left your job in November 2020 and started another job with Employer B in January 2021.

Supplemental IRS Guidance

Notice 2020-65 providing supplemental IRS guidance was issued on Aug. 28, 2020. It was brief and it didn’t answer all the questions that business owners and tax professionals had about implementation.

One of the issues that wasn’t covered was how employers should collect deferred payroll taxes from employees who separated from the company before the end of April 2021 when deferred payroll taxes were to be fully recouped. IRS Notice 2020-65 stated that employers could make arrangements to otherwise collect the taxes from employees if necessary.

Criticism of the Executive Order

Critics of the Executive Order claimed that deferring certain payroll taxes did nothing to help those who were hardest hit by the coronavirus pandemic: individuals who had been furloughed, laid off, or were otherwise unemployed. These individuals didn’t pay payroll taxes so the deferral didn’t affect or benefit them.

The House Committee on Ways and Means stated that the Executive Order does not affect the Social Security Trust Funds, as the taxes are only deferred. The tax wasn’t eliminated so the brief deferral should have no impact on the Social Security Trust Fund.

How Are Social Security Taxes Normally Paid?

Employees and employers are each legally obligated to pay 6.2% of the employee’s wages to Social Security for a total of 12.4%. The employee’s share is withheld from their paychecks and the employer must forward the total of both shares to the government. Self-employed individuals must pay the entire 12.4% because they’re effectively their own employers.

This rate is not expected to change in 2025.

What Is the Social Security Trust Fund?

The U.S. Treasury holds two Social Security accounts, one for Social Security and one for disability insurance. Social Security taxes are placed into the appropriate account and current benefits to those collecting are paid from it. These payments don’t deplete the account or trust fund as long as Social Security taxes continue to be paid in by active workers. The unused balance is reserved for future beneficiaries.

How Much Did the Executive Order Save Workers Per Paycheck?

A worker with annual earnings of $50,000 would be paid approximately $961 per week before taxes were withheld from that income. The Social Security tax rate for the employee’s half is 6.2% so this would work out to almost $60 per paycheck, reducing their take-home pay to about $900 a week. President Trump’s Executive Order saved them this debit but only temporarily. The tax had to be paid later.

The Bottom Line

President Trump signed the “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster” in August 2020 during his first term in office. The intention was to give American workers and employers a bit of a financial break while they were dealing with the fallout of the pandemic. They were permitted to postpone payment of their Social Security taxes from the last quarter of 2020 to the first quarter of 2021.

These taxes came due eventually, however, and it ultimately caused hardship for some.

The legacy and lessons of Apple’s co-founder

Reviewed by Margaret James

Apple is one of the most popular and powerful companies in the world. Not only that, it revolutionized how we communicate and more. Starting by creating computers, Apple surged to the forefront of the most important companies in history with the creation of the iPod, the iPhone, and the iPad. All of this success stemmed from the mind of its co-founder, Steve Jobs.

On October 5, 2011, Steve Jobs passed away at the age of 56. He had just left the CEO post at Apple, the company he co-founded, and returned to for a second period as its head. Jobs was an entrepreneur through and through, and the story of his rise is the story of Apple as a company, along with some very interesting twists.

In this article, we’ll look at the career of Steve Jobs and the company he founded, as well as some of the lessons Apple offers for potential entrepreneurs.

The fact that Apple was the first company to surpass the $1 trillion market capitalization mark, and later the $2 trillion and $3 trillion marks, is in no small part connected to the legacy and lessons learned from Steve Jobs.

Key Takeaways

• Steve Jobs and Steve Wozniak co-founded Apple in 1976, introducing first the Apple I and then the Apple II.
• Apple went public in 1980 with Jobs the blazing visionary and Wozniak the shy genius executing his vision.
• Executive John Scully was added in 1983; in 1985, Apple’s board of directors ousted the combative Jobs in favor of Scully.
• Away from Apple, Jobs invested in and developed animation producer Pixar and then founded NeXT to create high-end computers; NeXT eventually led him back to Apple.
• Jobs returned to Apple in the late 1990s and spent the years until his death in 2011 revamping the company, introducing the iPod, iPhone, and iPad, and transforming technology and communication in the process.

From Blue Boxes to Apple

Steve Jobs got his start in business with another Steve, Steve Wozniak, building the blue boxes phone phreakers used to make free calls across the nation.

The two were members of the HomeBrew Computer Club, where they quickly became enamored with kit computers and left the blue boxes behind. Founding Apple in 1976, the next product the two sold was the Apple I, which was a kit for building a PC. In order to do anything with it, the customer needed to add their own monitor and keyboard.

With Wozniak doing most of the building and Jobs handling the sales, the two made enough money off the hobbyist market to invest in the Apple II. It was the Apple II that made the company, which was incorporated in 1977. Jobs and Wozniak created enough interest in their new product to attract venture capital. This meant they were in the big leagues and the company would continue to grow.

The Roller Coaster Ride Begins

By 1979, Apple was making over $5 million in net income solely on the strength of the Apple II. The Apple II wasn’t state of the art, but it did allow computer enthusiasts to create and sell their own programs. Among these user-generated programs was VisiCalc, a type of proto-Excel that represented the first software with business applications.

Although Apple did not profit directly from these programs, they did see more interest as the uses for the Apple II broadened. This model of allowing users to create their own programs and sell them would reappear in the app market of the future but with a much tighter business strategy around it.

By the time Apple went public in 1980, the dynamic of the company was more or less set. Steve Jobs was the fiery visionary, with an intense and often combative management style, and Steve Wozniak was the quiet genius who made the vision work.

Apple’s board of directors wasn’t too fond of such a power imbalance in the company, however. Jobs and the board agreed to add John Sculley to the executive team in 1983. In 1985, the board ousted Jobs in favor of Sculley.

$10.2 Billion

Steve Jobs’ net worth at the time of his death in 2011.

The Gap Years

Steve Jobs was rich and unemployed. Although he wasn’t working at Apple, he was far from idle. During this time, from 1985 to 1996, Jobs was involved in two big deals; the first of which was an investment.

In 1986, Jobs purchased a controlling stake in a company called Pixar from George Lucas. The company was struggling, but its eventual success in digital animation led to an initial public offering (IPO) that earned Jobs around $1 billion.

The second was a return to his old obsession with computers, founding NeXT to create high-end computers. These were expensive machines with an operating system representing the best attempt yet at making the power of UNIX fit into a graphical user interface. When Tim Berners-Lee created the World Wide Web, he did so using a NeXT machine.

Of these two deals, NeXT proved the most important, as it turned out Apple was looking to replace its operating system. Apple bought NeXT in 1996 for its operating system, bringing Steve Jobs back to the first company he founded.

Getting Apple Back on Track

When Jobs returned, the company wasn’t in a good place. Apple had begun to flounder as cheap PCs running Windows flooded the market. Jobs found himself in the driver’s seat again and took some drastic steps to turn around Apple’s decline.

The company asked for and received a $150 million investment from Bill Gates. Jobs used the money to ramp up advertising and highlight the products Apple already offered while choking off research and development (R&D) money in non-producing areas.

The NeXT operating system was used to create the iMac, Apple’s first hit PC in a long time. Jobs followed this up with a list of successes from the iPod in 2001 to the iPad in 2010.

The years between saw Apple dominate the smartphone market with the iPhone, open up an e-commerce store with iTunes, and launch branded retail outlets called, what else, the Apple Store. When Jobs stepped down as CEO, Apple was scrapping with Exxon for the world’s largest market cap.

How Much of Apple Did Steve Jobs Own?

Surprisingly, at the time of his death, Steve Jobs only owned 0.24% of Apple. The bulk of his wealth came from the shares he owned in Disney, which was approximately 7% of the company.

Why Did Steve Jobs Create Apple?

There are a few reasons why Steve Jobs created Apple. One being his entrepreneurial spirit, another being his interest in computers, and also his and Wozniak’s vision of making computers accessible to the larger public by making them small enough to fit into homes and offices.

How Long Did Steve Jobs Leave Apple?

Steve Jobs was fired from Apple in 1985 and was brought back in 1996 when his company, NeXT, was purchased by Apple. This means he was gone from Apple for 11 years.

The Bottom Line

It’s impossible to sum up Jobs’s career in a single article, but a few lessons stick out. First, innovation counts for a lot, but innovative products fail without proper marketing. Second, there are no straight paths to success.

Jobs did get wealthy early on, but he would be a footnote today if he hadn’t returned to Apple in the 90s. At one point, Jobs was kicked out of the company he helped create for being hard to work with. Rather than change, he bided his time, then took over again, and this time his attitude was seen as part of his genius.

There is much more to be learned from the life of Steve Jobs, as there is in the life of every successful entrepreneur. The sheer hubris of the entrepreneurial spirit, the idea that you can do something bigger and better than it has ever been done before, always bears watching and studying, whether to imitate or just to marvel at.

Growth stocks can be a good way to build wealth. These are some of the best growth stocks for February 2025

Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, growth stocks tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as value and momentum.

Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of Jan. 30, 2025.

Growth Stocks in the Current Market Environment

In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher interest rates and slowing economic growth mean that the current environment may not be ideal for these firms.

That said, not all growth stocks benefit from the same market conditions. For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an industry sell-off following the unveiling of a competitive AI platform by Chinese firm DeepSeek in January 2025 is a reminder that these conditions may change suddenly.

Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to $4.9 trillion in 2023.

How We Chose the Best Growth Stocks

In our growth stocks screen, we focused on companies listed on either the Nasdaq or the New York Stock Exchange. To ensure that the firms we screened are well-established, we excluded stocks trading under $5 per share, those with a market capitalization under $300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers.

From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable market sentiment, or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns.

How to Invest Wisely in Growth Stocks

Besides 30-day return, there are many key financial ratios that are helpful to use to identify potential growth stock investments. Using multiple metrics provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains.

Earnings Per Share (EPS) Growth

Earnings per share (EPS) growth is a measure of the percentage increase in a company’s earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns.

Price-to-Earnings (P/E) Ratio

Price-to-earnings (P/E) ratio is a comparison of a company’s stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects.

Price-to-Book (P/B) Ratio

Price-to-book (P/B) ratio is a measure of a firm’s market value against its book value, or the net value of the assets on its balance sheet. Some contrarian investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it’s important to take stock of how a particular company compares with its peers.

How to Find Growth Stocks

Investors don’t have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider.

Looking at a prospective growth stock investment, you should consider the company’s revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It’s best to avoid stocks paying a dividend if you’re interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth.

Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.’s (NVDA) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities.

A company’s management and corporate governance can also be helpful clues to its growth potential. How have the firm’s leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance.

Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it’s helpful to benchmark a firm’s performance against the Russell 1000 Index. As of Jan. 30, 2025, the Russell 1000 had returned 2.6% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like compound annual growth rate (CAGR) can also help to compare two companies more directly.

Are These the Best Growth Stocks?

It is difficult to assess which growth stocks are the “best.” In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns.

Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

The CARES Act and new CAA Act temporarily extended unemployment benefits

Reviewed by Somer Anderson
Fact checked by Kirsten Rohrs Schmitt

The U.S. Department of Labor’s unemployment insurance (UI) program provides cash benefits to eligible workers who become unemployed through no fault of their own. The program is administered by individual states, but the law itself is a federal one.

Benefits, which are funded by payroll taxes, are paid weekly by individual state governments to those who qualify. But there are specific regulations about which unemployed workers qualify for this type of insurance.

The federal government made changes to the eligibility for unemployment benefits because of the outbreak of the COVID-19 virus. They were initially put in place after the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020. The benefits were extended with the passing of the Consolidated Appropriations Act, 2021 (CAA) and again after President Joe Biden was elected with the American Rescue Plan Act in 2021. Many of these benefits expired on Sept. 5, 2021.

Here’s a look at who does and doesn’t qualify for unemployment insurance under normal circumstances and how the rules were amended during the coronavirus pandemic in 2020 and 2021.

Key Takeaways

• You can’t collect unemployment benefits under normal circumstances if you quit your job or if you’re self-employed.
• To collect UI benefits, you must file a claim with the UI program in the state where you worked.
• The CARES Act expanded unemployment insurance benefits through three programs to help workers affected by the 2020 novel coronavirus pandemic.
• The Pandemic Unemployment Assistance (PUA) program extended benefits to the self-employed, freelancers, and independent contractors.
• People who left their jobs due to a risk of COVID-19 exposure or infection or to care for a family member may also qualify for UI benefits.

Who Qualifies for Unemployment?

While each state sets its own guidelines for UI benefits eligibility, you usually qualify if you:

• Are unemployed through no fault of your own. In most states, this means you left your last job because of a lack of available work.
• Meet work and wage requirements. You must meet your state’s requirements for time worked or wages earned during an established base period.
• Meet additional state requirements.

Important

To find details about your state’s unemployment insurance program, visit CareerOneStop, a job resource website sponsored by the U.S. Department of Labor.

How Do I Apply for Unemployment?

To collect UI benefits, you must file a claim with the UI program in the state where you worked. Depending on your state, you may be able to file a claim in person, by telephone, or online. When you apply, you need to provide certain information, including your Social Security number and the addresses and dates of your previous job.

In general, you should contact your state’s UI program as soon as possible after you become unemployed and file your claim in the state where you worked. However, if you worked in multiple states or in a different state than where you now live, contact the state UI agency where you reside for guidance on how to file your claim with other states.

Who Doesn’t Qualify for Unemployment?

Of course, there are other ways to get disqualified, depending on where you live. In most states, you can’t get UI if you:

• Are dismissed for workplace misconduct. What constitutes misconduct varies by state, but in general, intentionally violating safety rules, theft, embezzlement, violence, and other criminal activities disqualify you from receiving benefits. A failed drug test may also constitute misconduct.
• Are dismissed for misconduct outside of work. Some states don’t allow employers to terminate employees for misconduct outside of work, but some do. If so, it may also disqualify you from collecting UI benefits. 
• Turn down a suitable job. If you pass on a job that’s comparable to the one you lost, you will probably no longer qualify for benefits. Your state may consider factors like pay, your training and background, and safety when it determines what constitutes a suitable job.
• Don’t look for work. You must report to your state’s UI program that you’ve applied to a certain number of jobs each week. If you don’t report this information on time, or if you stop looking for a job, you may lose your benefits.
• Are unable to work. If you’re on maternity leave, dealing with a family emergency, temporarily disabled, or otherwise unable to work, you may lose your eligibility. However, in some states, you may qualify for benefits if you quit a job for medical reasons or to care for an ill family member.
• Receive severance pay. In some states, you can’t collect UI benefits if you also have severance pay. If you get eight weeks of severance pay, for instance, your UI eligibility starts nine weeks after you lost your job.
• Commit fraud. If you don’t report income or a new job, you are disqualified from receiving benefits. You may even have to repay your benefits or go to jail for fraud.

COVID-19 Unemployment Relief

The unemployment rate increased to its highest level since data was first collected when the coronavirus pandemic first hit the United States, peaking at 14.8% in April 2020 before dropping down to 6.7% in December 2020. It affected almost every industry and individual across the country, regardless of their age, gender, or employment status.

The federal government took steps to alleviate the burden on unemployed individuals, especially those who wouldn’t otherwise qualify for unemployment benefits. On March 27, 2020, President Donald Trump signed the $2 trillion coronavirus emergency stimulus package, referred to as the CARES Act. It temporarily expanded UI benefits through three programs, one of which allowed certain workers normally left out to collect benefits.

The CARES Act created the Federal Pandemic Unemployment Compensation (FPUC), which provided an additional $600 benefit each week to the uninsured. That benefit expired on July 31, 2020. The passage of the Consolidated Appropriations Act, signed by President Trump on Dec. 27, 2020, included new funding for the FPUC at a lower rate of $300 per week, through March 14, 2021.

President Joe Biden extended these benefits when he signed the American Rescue Plan Act on March 11, 2021. Additional provisions were put into place, allowing unemployed individuals to continue receiving benefits. All three of these programs expired on Sept. 5, 2021.

Note

Workers are not eligible for PUA benefits if they can telework with pay. Unemployed individuals also must be authorized to work to be eligible for PUA, so undocumented workers will not qualify.

Pandemic Unemployment Assistance (PUA)

Under normal circumstances, you can’t collect unemployment benefits if you quit your job or if you’re self-employed. This includes freelancers, independent contractors, and gig workers.

The program temporarily extended unemployment benefits to certain workers affected by the COVID-19 pandemic and eligible self-employed workers through Sept. 5, 2021. Workers who qualified included:

• Freelancers and independent contractors
• Workers seeking part-time work
• Workers without enough work history to qualify for state unemployment insurance benefits
• Workers who otherwise wouldn’t qualify for benefits under state or federal law 

Individuals were required to provide self-certification they were able to work and were available for work. They were also required to prove they were unemployed, partially employed, or unable or unavailable to work due to one of these COVID-19-related situations:

• They were diagnosed with COVID-19 or had symptoms and were trying to get diagnosed.
• A member of the individual’s household was diagnosed with COVID-19.
• The individual provided care for someone diagnosed with COVID-19.
• The individual provided care for a child or other household member who couldn’t attend school or a care facility because it was closed due to COVID-19.
• The individual was quarantined or was advised by a health care provider to self-quarantine.
• The individual was scheduled to start a job, didn’t have one, or couldn’t reach it due to COVID-19.
• The individual became the primary earner because the head of the household died as a result of COVID-19.
• The individual had to quit their job as a direct result of COVID-19.
• The individual’s place of employment closed as a direct result of COVID-19.
• The individual met other criteria set forth by the labor secretary.

Benefit amounts were calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program under the Stafford Act. The PUA had a minimum benefit equal to 50% of the state’s average weekly UI benefit (about $190 per week).

Other Unemployment Programs

The CARES Act, and the Consolidated Appropriations Act, the American Rescue Plan Act extended unemployment benefits through two other initiatives: the FPUC program and the Pandemic Emergency Unemployment Compensation (PEUC) program:

Keep in mind that the FPUC and the PEUC programs both expired on Sept. 5, 2021, along with the PUA.

What Disqualifies You From Unemployment?

Each state has its own rules for unemployment. Generally, in order to be eligible for unemployment, a worker must lose their job through no fault of their own, such as through involuntary termination or layoffs. They must also meet certain requirements for income and length of employment, which vary by state. Voluntarily quitting, absenteeism, or insubordination may disqualify a worker from receiving unemployment benefits.

What Is Constructive Dismissal?

Constructive dismissal occurs when an employee resigns due to unacceptable working conditions or a breach by the employer. For example, an employee who quits because the employer did not pay them on time, provided an unsafe working environment, or did not schedule them for upcoming shifts could be considered to have been constructively terminated, even though the employer did not formally fire them. Unlike other types of resignation, labor agencies will typically grant unemployment benefits to victims of constructive dismissal.

How Do Employers Pay for Unemployment?

Employers pay for unemployment insurance through payroll taxes, which are used to fund state unemployment programs. The state tax rate is typically based on the number of people a company employs, how much they’ve paid into the program, and how many employees have filed for benefits. Although a single employee is unlikely to make a big difference, a large number of unemployment claims could raise a company’s effective tax rate. When a former employee makes a claim, employers have the opportunity to dispute the claim and argue that the employee does not qualify for benefits.

The Bottom Line

Unemployment insurance represents one of the basic benefits of the modern welfare state. In exchange for a small tax deducted from one’s weekly paycheck, workers are granted the temporary assurance that they will continue receiving an income even if they lose their jobs. The benefits and requirements vary from state to state, so it is important to understand the exact rules to qualify for unemployment.

Reviewed by Robert C. Kelly
Fact checked by Vikki Velasquez

Massachusetts Sen. Elizabeth Warren announced in December 2018 that she would run for the 2020 presidency, pushing for sweeping “big, structural change.” However, in March 2020, she ended her campaign for president.

“Our country is in a time of crisis—the time for small ideas is over,” she said in June 2019 at the California Democratic Convention. “The entire structure of our system has favored the rich and the powerful, pick any issue you care about and it is painfully obvious.”

According to the 71-year-old Harvard Law School professor famous for grilling bank executives and spearheading the creation of the Consumer Financial Protection Bureau (CFPB), America’s problems, like gun violence and the racial wealth gap, were all connected to one thing, “power concentrated in the hands of the wealthy and the well-connected.”

Warren’s message during her campaign for president was: the system is rigged and it must be broken and remade. Once seen as a radical philosophy, the direction did garner some support from those disappointed in other Democratic leaders.

Key Takeaways

• Senator Elizabeth Warren from Massachusetts ran for the Democratic nominee for president during the 2020 election cycle.
• While she dropped out of the race that Joe Biden ultimately won, her economic plan is still considered a template for the Democratic Party’s platform.
• To Warren, the single biggest structural change America needed was a more equitable, safe, and prosperous society is of its financial and economic system.
• Warren dropped out of the presidential race March 2020.

Big, Big, Big

Warren has coined the term “economic patriotism” to describe a government prioritizing the interests of regular workers and middle-class people over those of the financial sector and giant, multinational corporations.

“For decades, Washington has lived by a simple rule: If it’s good for Wall Street, it’s good for the economy,” she wrote in a Medium post arguing that the financial sector has been sucking value out of the economy instead of benefiting it.

Warren planned to target private equity firms so they’d be “on the hook” for bad investments instead of exiting with tidy profits, expand postal banking for underserved families, and appoint Fed governors that would introduce a real-time payment system for everyday transfers even if it hurt large banks.

Warren also sought new executive compensation rules for the banking industry and a reenergized Financial Stability Oversight Council to monitor and curb leveraged corporate lending that has reached record levels. The current “carried interest loophole” allows investment fund managers to count carried interest, or their share of the fund’s profit, as capital gains for taxation, and Warren planned to close it. This is something former President Donald Trump pledged to do as well.

Warren also promised to go after powerful monopolies in the tech, banking, and agricultural sectors by reversing anti-competitive mergers, passing legislation so that large tech platforms like Alphabet Inc.’s (GOOG) Google Search and Amazon.com Inc.’s (AMZN) Marketplace were legally considered platform utilities, breaking up vertically integrated agribusinesses like Tyson Foods (TYSN), and pushing for the passing of her 21st century Glass-Steagall Act, which would prevent investment banks from accessing taxpayer-subsidized insurance.

Household Debt and Welfare

Warren sought to slash household debt by raising wages and bringing down costs like rent, health care, child care, etc. She advocated raising the federal minimum wage to $15, closing the race and gender pay gap, and empowering workers by supporting unions and allowing them to elect at least 40% of board members at large U.S. corporations.

Warren also introduced a bill that would cancel $640 billion of the current student loan debt, helping 95% of the 45 million people burdened. She also looked to make tuition free at all public technical schools, two-year colleges, and four-year colleges.

Since the debt ceiling is a dogged concern, Warren said she’d get rid of it or have it automatically increase based on the government’s spending decisions. Warren also advocated for a single-payer, Medicare for All system as was proposed by rival Sen. Bernie Sanders. She said it would cost $52 trillion over a decade, including $20.5 trillion of new federal spending, and save Americans $11 trillion over the same period. Providers, like doctors and hospitals, would have received smaller payments and brought down drug prices.

Trade and Manufacturing

While Trump’s strategy for helping U.S. trade and manufacturing was quite simplistic and focused on fixing trade deficits with tariffs, Warren advocated for America’s trade policy to be dictated by the need to protect workers, farmers, and the environment.

“America enters into trade negotiations with enormous leverage because America is the world’s most attractive market,” she wrote in another Medium post referencing economic patriotism. “As President, I won’t hand America’s leverage to big corporations to use for their own narrow purposes—I’ll use it to create and defend good American jobs, raise wages and farm income, combat climate change, lower drug prices, and raise living standards worldwide.” 

What would have looked like in terms of policy? Transparent trade negotiations with more involvement of the public, representatives from labor, environmental, and consumer groups on advisory committees, labor and environmental standards for trade partners, a multilateral agreement to protect domestic green policies from WTO challenges, border carbon adjustment, reduced exclusivity periods for drugs in trade deals, fair prices for American goods and country-of-origin labeling rules, enhanced border inspection requirements for food imports, ending Investor-State Dispute Settlement (ISDS), laws ensuring imposed duties benefit workers, and a new federal office to promote American clean energy products abroad, etc.

When it comes to manufacturing, Warren proposed a Green Manufacturing Plan that would have had the government invest $2 trillion over ten years in green research, manufacturing, and exporting.

Paying for It

Warren’s Green Manufacturing Plan would have been paid for with a Real Corporate Profits Tax that would prevent corporations from abusing loopholes. Under that plan, large U.S. companies that reported more than $100 million in profits (domestic and foreign) to investors would be charged 7% on every dollar of profit above it in addition to its liabilities under the tax laws. Research by University of California-Berkeley economists cited by Warren’s campaign said the tax would have raised $1 trillion in ten years.

When it comes to her health care plan, Warren promised: “not one penny in middle-class tax increases.” A new Employer Medicare Contribution program would have raised $8.8 trillion and companies would have spent 98% of the amount they usually spend on employee health insurance to the federal government. Businesses with less than 50 employees would have been exempt unless they already paid for health care, and large companies with extremely high executive compensation and stock buyback rates would have contributed more.

The rest of the money would have been raised through a variety of ways, such as better tax enforcement, tax on the higher take-home pay of employees, a tax on financial transactions, fees on large banks, a minimum 35% tax on foreign corporate earnings, eliminated accelerated depreciation of assets of companies, and a wealth tax.

Warren’s proposed Wealth Tax legislation was a new concept to most Americans. Essentially an additional tax of 2% to 6% on household net worth over $50 million would have raised $3 trillion over ten years and affect 0.1% of the population. Enforcement would have required additional investments in the Internal Revenue Service (IRS).

Important

On March 5, 2020, Elizabeth Warren delivered a speech, announcing she would be dropping out of the 2020 presidential election.

Warren’s Economic Plan vs. Other Candidates

Warren shared many views as other Democratic candidates; however, there were some fundamental differences between her platform and others. Below are highlights of the more prominent campaigns and plans she ran against.

Warren Vs. Biden

Elizabeth Warren proposed a wealth tax, while Joe Biden did not support it. Warren’s tax plan focused on raising taxes on high-income earners through income tax and capital gains tax rates. Biden favored expanding the Affordable Care Act and adding a public option, eliminating private health insurance.

Warren proposed free public college tuition and the cancellation of student loan debt, while Biden supported making community college tuition-free and expanding income-based loan repayment options. Both Warren and Biden acknowledged the need to address climate change, but differed in specifics.

Warren’s ambitious plan for transitioning to 100% clean energy was ambitious, while Biden’s plan focused on a $2 trillion investment in clean energy over four years and rejoining the Paris Agreement. Warren’s background as a consumer advocate led to a more aggressive approach to Wall Street reform, advocating for the reinstatement of the Glass-Steagall Act and stricter regulations on the financial industry. Biden also supported financial reform, but his proposals were generally considered more moderate.

Warren vs. Sanders

Warren and Sanders both supported a single-payer healthcare system called Medicare for All, with Warren’s plan allowing private insurance for supplemental coverage and Sanders’ seeking an immediate transition to a fully government-run system without private insurance. They also both proposed a wealth tax, but with different details.

Warren proposed free public college tuition and the cancellation of student loan debt, while Sanders proposed tuition-free public college and all student loan debt cancellation. Both candidates advocated for stricter regulations on Wall Street and addressing income inequality, but Warren’s proposals were more detailed and focused on breaking up big banks and combating corporate power.

Warren’s plan included more detailed policy proposals and investments in green manufacturing, research, and infrastructure. Sanders campaigned on a “political revolution” and a transformative approach to progressive policies, while Warren proposed significant reforms but was seen as more incremental and focused on detailed policy proposals.

Warren vs. Trump

Warren supported a single-payer “Medicare for All” healthcare system, while Trump sought to repeal and replace the Affordable Care Act (ACA) with an alternative plan. She proposed a wealth tax targeting the wealthiest individuals and higher taxes on high-income earners, aiming to redistribute wealth and increase funding for social programs. Trump meanwhile pursued tax cuts, particularly for corporations and high-income individuals, to stimulate economic growth.

Warren emphasized the need for stricter regulation of Wall Street and the financial industry, while Trump pursued deregulation and rolled back certain regulations. Warren also supported a pathway to citizenship for undocumented immigrants and comprehensive immigration reform, while Trump focused on tightening immigration controls, border security measures, and travel bans on predominantly Muslim countries. Warren emphasized a multilateral approach to foreign policy, criticized Trump’s “America First” approach, and sought to restore U.S. global leadership.

How Would Elizabeth Warren’s Wealth Tax Work and How Would It Be Implemented?

Elizabeth Warren’s wealth tax would impose a tax on the net worth of the wealthiest Americans, helping to fund her proposed policies. Implementation would involve assessing and taxing individuals’ assets, including stocks, real estate, and other investments.

How Does Elizabeth Warren Plan to Address Climate Change and Transition to Clean Energy?

To address climate change, Elizabeth Warren proposed transitioning to clean energy and reducing greenhouse gas emissions. Her plan involved prioritizing investing in renewable energy. This would be done by incentivizing green technology and implementing regulations to combat climate change and create a sustainable future.

How Would Elizabeth Warren Promote Affordable Housing and Address the Housing Crisis?

Elizabeth Warren proposed various measures to promote affordable housing. This included expanding access to rental assistance, increasing funding for affordable housing programs, and implementing regulations to address housing discrimination and speculative practices.

How Does Elizabeth Warren Plan to Address Racial and Gender Wealth Gaps?

Elizabeth Warren’s plan to address racial and gender wealth gaps involved targeted policies such as increasing access to affordable housing, expanding access to capital for minority-owned businesses, investing in education and job training, and combating discriminatory practices in the financial system.

The Bottom Line

Although Warren was an underdog by most standards, Warren’s campaign did gain some ground. She came in second place in the October-November of 2019 NBC News/Wall Street Journal polls. However, Warren dropped out of the presidential race in March 2020. Even though she failed in her bid to win the Democratic primary, some of her more popular ideas may be adopted by other candidates in the future.