California Stealin' Sacramento demands a loan from taxpayers.

[mule_train]

Source: Wall Street journal

California Stealin'
Sacramento demands a loan from taxpayers..ArticleComments (63)more in Opinion ».
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Desperation grabs for revenue are nothing new in politics, but California is once again leading the way in creative financing.

To help close yet another gaping budget deficit, now estimated to be $7 billion this year and reach as high as $20 billion next, Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1 and through 2010. The extra withholding tax will reduce Californians' take-home pay by about $1.7 billion for the year. But the lawmakers say this isn't a tax increase. OK, how about calling it a compulsory interest-free loan from taxpayers to the state?

According to the Franchise Tax Board, 10,004,000 Californians overpaid their state taxes last year and received an average refund of $903. The withholding penalty is expected to snatch between $20 and $90 a month from middle-class families. For those feeling the pinch of recession and living paycheck to paycheck, that penalty will hurt.

Of course, the government is obliged to return this money next spring when workers get their tax refunds, so this is the ultimate budget gimmick. It borrows from taxpayers now and deepens the budget hole next year. And we almost hate to ask: What happens come April if the state doesn't have enough money to pay the tax refunds it owes its citizens? Will taxpayers get IOUs the way state contractors did last year when Sacramento ran out of money?



Read more: http://online.wsj.com/article/SB10001424052748703932904574511923279377100.html?mod=djemEditorialPage#printMode

[DJ13]

1. When did compulsory interest free loans become legal?

This will set a bad precedent if its not challenged in court.

[mule_train]

2. it became legal the day they got their hands on your pay check before you do

well, not legal perhaps, but possesion is 9/10ths the law, as they say

[Kerrytravelers]

3. Yep. Both Mr. kt and I received notices from our employers on this very thing.

Mr. kt is already on a furlough, which basically knocks 15%-20% off each month. I'm in education. This additional 10% means a lot to people like us, and the overwhelming majority of the people of CA. But hey, why make those multi-millionaires pay one cent more? That would be wrong. :eyes:

[mule_train]

4. 'why make those multi-millionaires pay one cent more?'

plus it costs a lot to educate their pool cleaners and gardeners children

[Ian David]

5. Der Gropenfuhrer bankrupted the state because he's an economic girlie man.

[mule_train]

6. welcome to sunny Cantafordya LOL nt

[Xithras]

7. Just adjust your withholding to compensate.

Or do what I do, and claim so many deductions that no taxes are withheld at all. It takes some financial discipline though...you still have to pay the taxes, you just do so in a lump sum instead of biweekly installments. If you spend your "tax" money, you'll find out just how brutal the FTB can be in this state.