California rips off taxpayer – increases withholding 10 percent

For those of you who jump for joy at the thought of a big tax “refund” check, you’ll be plenty happy in California since they will be increasing the withholding amount 10 percent this weekend. The state is going to borrow money from you interest free – money you do not owe in taxes – and you might get it back later. Take action – adjust your withholding now!

I say you might get it back since the state has a history of dishing out IOUs California banks are hesitant to accept.

I have a huge issue with people who are happy to get a big tax refund. I actually get pretty mad at myself if my refund is more than $250 since I try to make adjustments to the amount of withholding during the year. I’d much rather have the capital in my possession and working for me instead of providing the government an interest free loan.

From the LA Times via Hot Air

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.

California taxpayers generally pay between 6 percent and 10.55 percent. It’s a graduated tax where the more you make, the more you pay. As of the beginning of the year, married couples who made between $74,466 and $94,110, paid $2,758.17 plus 8.25 percent of whatever they made more than the $74,466.

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.

This really does set a bad precedent, but there is a way for California taxpayers to put the breaks on the plan … they can adjust the withholding amount with their employer to ensure the state is not getting an interest free loan. Take steps to ensure you owe the state of California a few hundred dollars at the end of the year instead of the state owing you hundreds, or even thousands of dollars.

I wonder how they would feel if you owed them, and presented the state with an IOU next April?

12 replies
  1. Dimsdale
    Dimsdale says:

    I can just see Obama Jr., I mean Deval Patrick, licking his lips at the thought of this potential windfall.

     

    Tax and spend, spend and tax.  The liberal way.

  2. aetherlightning
    aetherlightning says:

    Just a point of clarification,

    I looked up the current tax withholding tables for California.   If you earn between 25000 and 35000 they currently hold 6% of your income.   So a 10% increase on that 6% would mean you are now withholding 6.6% of your paycheck.   That works out to about a $5 per week reduction in pay, or 1% tax on your total income, not 10% tax on your total income.

    While this 1% tax increase is still appalling, it's being misreported and misrepresented as a 10% tax.   News outlets need to be more responsible and not report misleading numbers.

    That said, don't expect to see that money back, I don't think we're even half way through this recession yet, and if California doesn't start cutting something soon, it's going to have to increase taxes by a lot more then 1% to stay afloat.

    • Steve McGough
      Steve McGough says:

      Thanks for your comment (please do come back), but in no way did I misrepresent this increase in withholding. I'm not sure I've seen any story that represents this as anything it is not. It's a 10 percent increase in withholding. No clarification is needed.

      There may be some reading comprehension issues … but that's not my fault.

      • aetherlightning
        aetherlightning says:

        Your headline was one of the most honest ones I've seen actually, I didn't mean it as a dig on you at all.   The way I found out about this was a phone call from my mother in law telling me California instituted a new 10% tax.   My google search returned these headlines:

        “Calif. boosts income tax collection 10 percent – cbs13.com”

        “State of California starts witholding 10% of millions of workers. . .”

        At first glance, the headlines seem to imply what I was being told.   I had to read pretty far in to most of them before I found what was actually being increased  by 10%.

        I wanted to get some perspective on this, and that actually required me to look up the witholding tables on the state's website and do the math myself.   Not a single article I read seemed to have that information.

        The reason I posted it on yours was that it turned out to be really difficult to post anything on the other sites, and I found your article to be more honest and straight forward then most.

        If we're going to combat the constant creep of government into our lives, we have to do it with a clear head, and with a good comprehension of exactly what is being done to us.

        We are deeply distressed by the fact that the government would raise taxes and then try to deliberately disguise it as something else for the sake of politically covering their asses.   We just have to be careful, I'd hate to lose this political argument when someone is smart enough to accuse us of fighting dishonesty with hyperbole.

    • micheleq.
      micheleq. says:

      aetherlightning,

      I believe the article said "…Increasings withholdings 10%".  You just responded to your own comment!  If your withholdings are already 6%, a 10% increase now means that your withholdings are 6.6%!  The article was not misrepresented….YOU misread it!  Mr. McGough was saying that the state increased our current withholdings by 10%  (i.e., 10% increase of 6% equals 6.6%).

      Mr. McGough does not need to be more responsible in reporting numbers, some readers simply need to be more educated (or simply have a better understanding of both English and math).

      Use a calculator or ask someone who knows math!  Better yet, re-read the title of the article and you might figure out that you simply did not understand the English!

    • micheleq.
      micheleq. says:

      aetherlightning,

      I responded to your comment before reading Mr. McGough's response to your original comment about missrepresenting facts.  I think that he summed it up when he said that there might be some "reading comprehension issues", and that wasn't his fault!  You should make sure you understand what you are reading before you try to tell the author he is misreporting or misrepresenting.

      Education is wonderful!

  3. Jeff S
    Jeff S says:

    New York is heading down this path.  If  California gets away with this then we'll see how many other state legislatures will try to adopt this practice.

  4. el pelon
    el pelon says:

    Total frustration & enough!  Only with a complete, 100% change in California's elected State officials will expenses ever be cut.  Not sure of the legal process, but I suggest ONE immediate,  massive "recall" of them all.  Unheard of – but it is required.

  5. PatRiot
    PatRiot says:

    Oh great people of the Granola (fruits, flakes and nuts) state of California.  The bad vibes you feel are not from your feng shui being off.  It is from your common sense kicking in.  

    Yes you must act on your feelings – minimize the amount of withholding the state takes from your paycheck.  Embrace the insignificance of the Hollywood crowd, for they have distracted you from what is truely important.  Seek out your elected officials and throw them from the high places and replace them with persons of virtue: those that honor the rule of law and the Constitution.  Do this in the name of common sense.  For the example you set shall lead this nation to failure or back to the great Republic that it was destined to be.

Trackbacks & Pingbacks

  1. California Dreaming in Congress…

    California just jacked up it’s withholding rates to force people to overpay their taxes, because the State decided it needs……

  2. […] Starting Sunday, the state is increasing 10 percent the amount of tax dollars it withholds from your paycheck. The change was part of the Legislature’s attempt to address the state’s fiscal problem this year, but it technically doesn’t qualify as a tax increase. […]

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