Free Markets, Free People

California – “We Need The Money More Than You”

Who was it who said “the government powerful enough to give you things is powerful enough to take things away”?

Well that has never been more true than in California where the state has decided to arbitrarily increase withholding by 10% because it couldn’t manage its debt. IOW, Californians take less home so the state can pay its debt:

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.

You’ll get a “larger” refund if the state has the money to pay refunds. Weren’t they issuing IOUs not long ago?  But that’s not the point. The state has just made it clear that it has first claim on what Californians earn. If that doesn’t scare the bejesus out of them, I’m not sure what will.

And if that doesn’t increase the emigration to less oppressive climes I’m not sure what would.



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17 Responses to California – “We Need The Money More Than You”

  • So what happens when everyone starts claiming 5 or6  exemptions? 
    I am betting a lot of folks who claim zero will change their withholding status .  This will result in the state probably getting less money than they would have.  Liberals never learn.    

    • I wondered about that myself.  In Utah my husband’s employer allows us to withhold an amount we specify for state taxes.  Maybe the law is different in California?  Otherwise, what’s to stop people from minimizing their withholding through whatever mechanism is available to them?  If there is such a mechanism, did it not occur to the legislators that people who otherwise ignore the details of their withholding might suddenly start paying attention when a chunk of their paycheck went missing in the middle of a recession?

      • There’s none. In fact, the article says that Californians can do that, but they’re counting on most doing nothing. They’re counting on ignorance and antipathy to fill their coffers.

  • They just  don’t care anymore.

    Though I don’t wish to see the people of California put through the mess that’s coming, the silver lining is that we get to see an economic meltdown of our largest state as a preview of a meltdown at the federal level. Maybe even the most disconnected of voters will take a lesson from that.

  • Remember, if you owe your taxes to only send it in on Apr. 15th…..via paper filing.
    Or better yet, file for extension and milk it to the last second.

    • Even if you file an extension, the money you owe must be paid by April 15.  The extension is only for filing the return, not paying the money.

    • I think that if you owe “too much” on April 15, then you have to pay penalties for not paying enough quarterly. I don’t remember what the limits are, but I remember checking into having $0 withholding and found that it could cause quarterly (rather than yearly) deadlines.

  • Don’t forget — less than a year ago, they kept all of the refunds an extra couple of months. So they’re giving themselves an extra-long interest free loan.
    Maybe they just even bother to give them back this year. Who knows?!
    I’m really starting to want to leave here even more now. But it’s not really possible at this time.

  • It is sure is a good thing they worked so hard to fix the budget a month or two ago.

  • The state has just made it clear that it has first claim on what Californians earn.

    Is that any different that other states or the Feds?

  • That outraged Californians haven’t decended on Sacramento to lynch Ahhh-nold and the rest of the parasites in the state assembly is mute testimony to how well libs have indoctrinated us into believing that our role in life is to serve as a revenue stream for a wise, beneficent government.

  • Be careful not to draw attention to yourself, but pay attention to what you owe and adjust your withholding.

    The states normally use the Federal Income Tax exemptions (Form W4) to calculate their withholding.  Check with your state laws, but the Feds do not penalize taxpayers who withhold the higher of 100% of last year’s tax or 90% of this year’s tax.  If your income varies from quarter to quarter, withholding must follow your income curve.  Employers have forms available in HR.

    Ideally, you should owe a few $100 on April 15th while avoiding interest and penalties.  If you owe the tax man money, he cannot stop your refund.