The Government of California is out of control
Posted by Mike Sylvester - 11/6/09 @ 3:54 pm - Filed Under National Politics
The state of California has spent so much money that it may well have to file bankruptcy…
The state’s finances are so bad that they recently enacted a law that puts in place new state with-holding tables in California as of November 1st, 2009. These with-holding tables require employers to with-hold 10% more from each employees pay for California with-holding tax as of November 1st, 2009.
The State of California keeps telling its citizens that this is NOT a tax increase; instead, it is an interest free loan from the taxpayers of California to the California state Government through with-holding taxes.
From a technical standpoint the state of California is correct; however, I wonder how the voters of California will feel when their next paycheck is lower than the previous one?
Can you even imagine living in a state where they would increase your state with-holding taxes in order to force you to give you state an interest free loan?
Does anyone reading this post think that California did the right thing?
Mike
Comments
9 Responses to “The Government of California is out of control”
Leave a Reply
Yes, they absolutely, positively did the right thing.
Evert,
I can sense your sarcasm…
Mike
Mike,
Get ready for the federal IRS to do the very same thing!
So what stops the citizenry from declaring more exemptions to offset the rate increase since the additional tax withheld will not be needed to pay taxes?
Working backwards, it would not be difficult to expand itemized deductions to include the needed extra withholding … and this form would not prevent you from doing so.
http://www.edd.ca.gov/pdf_pub_ctr/de4.pdf
What’s good for the goose is good for the gander.
Mike-
Sorry, you’re right. It’s the result of long years of accumulating frustrations and blogging under the influence. California is a place with spectacular scenery and perfect weather choking on people, cars and bad government. The epicenter of the tech bubble, the housing bubble and eventually another earthquake of incredible destruction. Like many events in the past, we can see it coming but all we can do is watch it unfold and when it happens say “I told you so”.
Except now we can also blog about it.
Gadfly,
Many Californians will do exactly what you say.
That being said it will take them time to contact their payroll department at work and get the changes made. I imagine the majority of Californians will just live with it.
Mike
Mike:
Yes, you are correct. Many people under-claim exemptions to get money back from the government every year.
I even know accountants who do so. The annual “vacation” fund will be larger in Lalaland next year. I sure hope those folks who still live there are prepared for IOUs.
If a company declares bancruptcy, it’s debts are lowered or eliminated. This is the reason credit is often restricted for companies who appear to be on the verge of filing.
So, let’s say California takes extra money from it’s workers, as a temporary measure of course, with the stated intention of paying back this debt at a later time. If they declare bancrupty, could this debt be lowered or eliminated?
I think this is just a ruse for the state to take more money from the people (permanetly), while claiming they never raised taxes.
This is my prediction:
Californians will be paid back in full next year, but the withholding increase will be made permanent. California will eventually default in the next few years, and a whole lot of people will get hosed.