California takes interest-free loan from working people

posted at 10:30 am on October 31, 2009 by Ed Morrissey

As if working people in California didn’t have a tough enough time, they are about to see their paychecks get a little lighter, courtesy of their political class in Sacramento.  In order to help close a budget shortfall, the state will increase withholding from paychecks by 10%, in essence forcing every working person in California to make an interest-free loan to the state:

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.

Think of it as theft.  Most Californians won’t be as sanguine about getting their tax refunds next April, not after watching the IOUs go out this summer from Sacramento.  What happens when April rolls around and the state still doesn’t have the cash?  Do they confiscate the refunds and promise to pay them back in 2011?

This all starts with state leadership unwilling to make the tough decisions on cutbacks in the massive state bureaucracy.  Instead of cutting their own budgets, they’re cutting the personal budgets of all Californians by seizing their assets without compensation.  Golden State residents should ask themselves why they put up with a group of politicians who claim to be unable to reduce state spending but have no problem dipping into the pockets of Californians who actually work for a living.

Next November, Californians should conduct a full-unemployment program in their state legislature, and “withhold” 100% of the salaries of the current political class.


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