Free Markets, Free People

IOUs


California Chutzpa

The disaster that is California government has now turned into the theater of the absurd:

Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes.

The vendors have filed a federal class-action lawsuit. But the depth that government will stoop too to collect revenue never surprises me. With housing prices crashing everywhere, local governments continued to try to collect at the same value rates as before or, in some places, actually raise the taxes.

And here we have California issuing, what to this point are absolutely valueless promises to pay – maybe – and then expecting those in receipt of those worthless bits of script to treat them as real money and to pay taxes on the amount in real money.

The onions it takes to make that sort of demand is just breathtaking. Or perhaps arrogance is a better word. But regardless it is just a stunning thing to behold.

And, as an aside, you can’t help but wonder what California will pay the lawyers it hire to defend its indefensible demand. As a further aside, it wouldn’t surprise me at all to see the court find in the state’s favor.

~McQ