…But there are times I want to nuke Sacramento from orbit. Usually (and in this case) it’s because of some boneheaded move by the State government. What did they do this time? Oh, nothing, really, except decide to take an extra ten-percent from our paychecks in the middle of a recession:
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.
“The state’s suddenly slapping people upside the head,” said Mack Reed, 50, of Silver Lake. “It’s appalling how brash that is.”
Brittney McKaig, 23, of Santa Ana said she expects the additional withholding to affect her holiday spending.
“Coming into the holidays, we’re getting squeezed anyway,” she said. “We’re not getting Christmas bonuses and other perks we used to get. So it all falls back on spending. The $40 gift will become a $20 gift.”
Sheer genius. We’re now over a year into a severe recession, and this Christmas is when the stores will really feel the pinch. The money the state takes will be unavailable to retailers big and small, who will thus have less money with which to pay for new employees or keep current ones. California’s real unemployment rate tops 17% at least, and many people rely on part-time seasonal retail jobs to help them make it, so every job counts. The last thing you want to do is divert money to non-productive expenses, such as a blueberry commission.
“But at least it’s not a tax!”
What a farce. In California, all tax increases have to be approved by a two-thirds majority of both chambers of the legislature, something that’s hard to get since the Republicans have just enough votes to hold the line. We are already one of the most highly-taxed states in the Union, so any increases are very unpopular right now. So the legislature and the Franchise Tax Board get around this by calling it a “loan.”
When Tiquon and Little Dog take a forced “loan” from a South-Central liquor store, it’s called “robbery” or “extortion.” But when Sacramento does it to the whole state, it’s okay, it’s just a loan.
You can call it what you want, Governor, but a tax is a tax.
“But wait,” you say, “they promise to pay it back!”
Would you like to buy the Golden Gate Bridge, too? First, this is an interest-free loan. Whatever money you “loan” to California will be worth less when you get it back, because inflation isn’t accounted for. You are permanently losing money. The state gets the benefit of the current value, you have less when you get it back, ergo that forced exaction of value from our money is a tax.
Oh, and remember those IOUs from earlier this year when the state was running out of money? For years now, the government has not been able to accurately project revenues, consistently overestimating them. What makes anyone think they can get it right this time? How will you feel if (more likely “when”) your involuntary loan is repaid with an interest-free IOU?
Sacramento’s irresponsibility and unwillingness to face reality is appalling. These are people we elected to run the state for the best interests of all, yet they continually mortgage our future and dig an ever deeper fiscal hole, refusing to make the admittedly harsh spending and tax cuts needed to begin to restore California to financial health. Instead they pander to the public employees unions ( the prison guards, for example) and other left-wing single-interest groups that live off the taxpayer and in turn are big donors to legislators’ election campaigns. So they kick the can down the road, pretend that “this time, we’ve fixed the problem” and hope that no one remembers the next time it happens.
California’s political culture is sick, and its public servants instead constitute a ruling class. This is not a democratic republic: thanks to safe seats and special-interest donors, our state government is instead a self-perpetuating oligarchy of professional politicians. This farce with accelerated withholding is just another example of how out of touch with the average Californians the Mandarins of the Golden Dome have become.
If California is to have any Hope, it’s time for a major Change.
(hat tip: Hot Air)