Right Thinking From The Left Coast
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I’ll Take Some Of That

Is this even legal?

Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners—holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

Technically, it’s not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers’ annual tax bills won’t change.

Think of it as a forced, interest-free loan: You’ll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.


The extra withholding may seem like a small amount siphoned from each paycheck, but it adds up to a $1.7-billion fix for California’s deficit-riddled books.

From a single taxpayer earning $51,000 a year with no dependents, the state will be grabbing an extra $17.59 each month, according to state tax officials. A married person earning $90,000 with two dependents would receive $24.87 less in monthly pay.

The principle of the thing bothers me more than the amounts. As much as I would oppose a tax increase, at least that would be legitimate—and permanent (modulo high earners leaving the state).  But the way this is being pitched is that this will now be a permanent thing.  That, like Prometheus, the taxpayers will regularly have a part of their paycheck ripped out only to have it grow back every April.

This is just a shell game.  It’s moving small piles of money around to create the illusion of fiscal solvency.  It’s the sort of thing that, if a Wall Street firm did it, would land its CEO’s in jail.  Only in California would it be called “leadership”.

Posted by Hal_10000 on 11/01/09 at 02:27 PM in Cullyforneah • Permalink


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