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Posted: 11/3/2009 4:31:03 AM EDT
California to withhold a bigger chunk of paychecksThe amount goes up 10% on Sunday as Sacramento borrows from taxpayers. Technically, it's not an income tax increase: You'll get the money back eventually.By Shane Goldmacher and W.J. Hennigan October 31, 2009 Reporting from Los Angeles and Sacramento 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. But with rising gas costs, depressed home prices and double-digit unemployment, the state's added reach into residents' regular paycheck isn't sitting well with many. "The state's suddenly slapping people upside the head," said Mack Reed, 50, of Silver Lake. "It's appalling how brash that is." Brittney McKaig, 23, of Santa Ana said she expects the additional withholding to affect her holiday spending. "Coming into the holidays, we're getting squeezed anyway," she said. "We're not getting Christmas bonuses and other perks we used to get. So it all falls back on spending. The $40 gift will become a $20 gift." 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. California will probably continue to collect the tax at a higher rate for many years –– or find an additional $1.7 billion to slice from a future budget, an unlikely occurrence. All workers who have state taxes withheld will see their paychecks shrink. "Many families are sitting at their kitchen table wondering how they're going to make ends meet," said state Sen. Tony Strickland (R-Thousand Oaks). "At the same time, the state of California is taking a no-interest loan." The provision is one of numerous maneuvers state lawmakers and Gov. Arnold Schwarzenegger approved in the summer to paper over the state's deficit. Many of the changes, including the extra withholding, were little noticed outside of Sacramento. Savvy taxpayers can get around the state's maneuver by increasing the number of personal withholding allowances they claim on their employer tax forms, said Brenda Voet, a spokeswoman for the state's Franchise Tax Board. "People can get out of this," she said, noting that most people would have to change their allowances through their employers. California's budget leaders are banking on the hope that most won't. The increase is coming at a bad time for store owners, many of whom depend on the holiday shopping season to keep their businesses alive. "I don't think there's any question it's going to impact consumers' spending," said Bill Dombrowski, president of the California Retailers Assn. "Any time you reduce people's disposable income, there's going to be a negative effect on the retail sector." But Stephen Levy, director of the Center for Continuing Study of the California Economy, wasn't so sure. "It's having a relatively small impact on people's income," Levy said, pointing out that many families will receive only $12 to $40 less each month. Yet Erika Wendt, 28, of San Diego said she already lived on a tight budget: She rides her bike to work, for instance, to save on gasoline and parking costs. "I am frustrated as this directly impacts my weekly budget –– what groceries I buy, how much I drive and can spend on gas," she said. "Now money will just be tighter, and I'm not sure where else I can cut back." The extra withholding comes in addition to tax hikes the state enacted this year. In February, state income tax rates were bumped up 0.25 of a percentage point for every tax bracket. The dependent credit was slashed by two-thirds. The state sales tax rate rose 1 percentage point. The vehicle license fee nearly doubled to 1.15% of a car's value. Lawmakers and the governor also approved deep cuts to schools, social services and prisons to fend off one of the steepest revenue losses in California history. Temporary budget bandages, such as the increase in withholding, were included at several points this year to avoid higher taxes and deeper cuts, said H.D. Palmer, a spokesman for the state Department of Finance. Sacramento, meanwhile, is awash in red ink again. The state controller recently said revenue in the budget year already had fallen more than $1 billion short of assumptions. Outsize deficits are projected for years to come. Such temporary measures as the withholding tax increase don't really fix the budget gap, "they just more or less hid it," said Christopher Thornberg, a principal with Beacon Economics in Los Angeles. "I call it a fraud." shane.goldmacher@ latimes.com william.hennigan@ latimes.com |
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yeah, but I can surf in janury, pack up and go snowboarding to the mountains and be back at my bev hills house to bbq in 80 degree weather
all while wearing shorts |
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Time for everyone to change their exemptions to compensate.
Seriously, that's some grade A bullshit. Reminds me of the last days of this guy. |
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Quoted:
How is this legal? Posted Via AR15.Com Mobile "The provision is one of numerous maneuvers state lawmakers and Gov. Arnold Schwarzenegger approved in the summer to paper over the state's deficit. Many of the changes, including the extra withholding, were little noticed outside of Sacramento." It's the government they deserve. |
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This is going to be the blueprint of how all of these states going broke are going to try to pay for it all.
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here's a thought, how about a 10% decrease in the fucking money it gives to the parasites?
Who is John Galt? TXL |
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Quoted:
Time for everyone to change their exemptions to compensate. Time for everyone to change their exemptions so that they owe the state a little bit on April 15. |
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"People can get out of this," she said, noting that most people would have to change their allowances through their employers. California's budget leaders are banking on the hope that most won't.
I guess this would be too much like thinking... |
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Money seized from the taxpayers to support the freeloading invaders.
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Cali has now moved from punishing its own government employees to stealing from everyone in the state (everyone that isn't on welfare). I don't even know what to say or where to begin. Maybe 'green shoots'! lol... |
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This is why some states are pushing for federal government healthcare.
State run universal healthcare is bankrupting them; they want other states to pay for it. Crap like this is just a temporary solution until they can ram federal healthcare down our throats. |
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Let me guess... they'll pay back their zero-interest mugging with IOUs that can't be cashed until 2043?
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California is one place where a tax on everything sold there would make sense.
Since the illegals which make up almost 10% of their southern population and pay no taxes. So put a 15% tax on everything. |
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I wonder if this will cause more people to get fed up and vote accordinly or cause more people to get fed up and leave?
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Quoted:
This is why some states are pushing for federal government healthcare. State run universal healthcare is bankrupting them; they want other states to pay for it. Crap like this is just a temporary solution until they can ram federal healthcare down our throats. And we have a winner. States that are run almost reasonably will be mugged to pay for California, and the 55 members in Congress from CA will force it on us at the point of a gun. |
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“A government big enough to give you everything you want, is strong enough to take everything you have." - Gerald Ford
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Quoted:
yeah, but I can surf in janury, pack up and go snowboarding to the mountains and be back at my bev hills house to bbq in 80 degree weather all while wearing shorts Other than your mommy not allowing you to cross the street and/or you're the guest of local, state or Federal authorities at an all men's communal living institution ––––––––––––––––––––––- it's fairly easy to rectify the problem... Just move... |
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Quoted: This is going to be the blueprint of how all of these states going broke are going to try to pay for it all. This! Don't be surprised if Obongo does it on the national level.... |
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Quoted:
Quoted:
Time for everyone to change their exemptions to compensate. Time for everyone to change their exemptions so that they owe the state a little bit on April 15. And you don't need receipts for charitable contributions of less than $250. Just sayin'. |
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Quoted: Let me guess... they'll pay back their zero-interest mugging with IOUs that can't be cashed until 2043? +++++++++++ |
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So California just walked down to the "Payday Loans" store and got a cash advance?
Great. |
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You'll get the money back eventually.
Famous last words.... No wonder people are leaving that state in droves. Pretty soon, they'll have to tax the remaining people 100% just to live there. HH |
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Pretty soon, they'll have to tax the remaining people 100% just to live there
When the taxes do reach 100% can we call it communism then? |
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And here, ladies and gentlemen, is what is so horrifically fucking Orwellian about withholding schemes. The government has direct access to your paycheck...and as such, what's to stop them from simply taking more money when they want it, tax or no?
Answer: Nothing. Here's hoping that somebody sues their ass and that a court somewhere in that area with some common sense whaps the Cali officials on the nose with a newspaper and says "No! Bad politician! No donut!" Seriously, folks....if this kind of thing doesn't scare the living shit out of you then you're asleep. This is going beyond the power to tax...this is the equivalent of government officials coming to your house and taking your car at gunpoint. "We'll bring it back when we're done with it." The mindset that actually lets a politician say "Why don't we just take more from withholding in people's paychecks?" is so fucking scary I can't even put it into words. THIS is what liberalism buys us...the absolute abolition of all property rights. Everything you have belongs to the government and if you're lucky they'll let you have some of it when they are done taking care of their campaign promises. This ought to lead to a taxpayer revolt that would make Prop. 13 look like a pre-school game of duck duck goose. People ought to be melting the phone lines to the governor's office and to the legislators asking them where the fuck did they get the right to simply confiscate people's property without compensation...and they should use those words. "Where the fuck do you get off, Arnie?" |
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Somehow, someway, they will still end up collecting less tax revenue by doing this.
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Quoted:
yeah, but I can surf in janury, pack up and go snowboarding to the mountains and be back at my bev hills house to bbq in 80 degree weather all while wearing shorts People keep telling me how great it is out there. |
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Why yes, I have 12 dependent children...
What can I say? I love pie! |
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"People can get out of this," she said, noting that most people would have to change their allowances through their employers. California's budget leaders are banking on the hope that most won't.
And they won't. Too lazy.
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Quoted:
They can do that..... or They could cut spending. yeah, like that's ever going to happen |
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Quoted: Somehow, someway, they will still end up collecting less tax revenue by doing this. Right before the christmas retail season and in the largest economy in America. This could be the straw that broke the camel's back. |
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So what is the total tax burden on median income Californians, anyway? Federal and state income taxes combined, I mean.
Florida is a no income tax state. I like that a lot. |
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Quoted: Quoted: Somehow, someway, they will still end up collecting less tax revenue by doing this. Right before the christmas retail season and in the largest economy in America. This could be the straw that broke the camel's back. That's kinda what I thought too. At what point do people in California just say "enough is enough"? I know moving isn't as easy as it sounds, especially if you've got a house and you're under water already. |
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Quoted:
I wonder if this will cause more people to get fed up and vote accordinly or cause more people to get fed up and leave vote from the roofs like a Korean grocer during a riot? Fixed. No charge. |
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California is being run into the ground because of the Liberals with their socialist programs.
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Where's that article about how much more awesome and 'dignified' California is than Texas?
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Quoted: So what is the total tax burden on median income Californians, anyway? Federal and state income taxes combined, I mean. Florida is a no income tax state. I like that a lot. What about those license and title rate hikes? While FL isn't grabbing directly out of our paychecks yet, they're well on their way. If the economy gets worse and we start losing more tourists expect the money grubbing to get more creative. |
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California is a high tax, high service model, Texas, just the opposite, low tax, low service model. Except what has happened is CA has failed to deliver the high service and Texas has delivered better than expected. The result is that per capita spending in CA is over $10,000 and in Texas it is $6900 and the schools are probably better in Texas now and most importantly, the economic climate is definitely better.
With the Unions exerting so much political clout, CA is going to have a tough time changing. Between April 1, 2000, and June 30, 2007, an average of 3,247 more Americans moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas saw a net gain, in an average week, of 1,544 people. Aside from Louisiana and Mississippi, which lost population to other states because of Hurricane Katrina, California is the only Sunbelt state that had negative net internal migration after 2000. All the other states that lost population to internal migration were Rust Belt basket cases, including New York, Illinois, New Jersey, Michigan, and Ohio. |
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I'd hate to be someone who does payroll work today.
Those people will be mobbed by employees filing forms to increase their withholding exemptions. More predictable unintended consequences. Quoted:
Why did they stop at 10%? They probably understand at some level that the harder they push people for free loans, the more of us will bother increasing our withholding exemptions. |
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