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Copper Catcher
Administrator
USA
2092 Posts |
 Posted - 11/19/2009 : 10:57:41
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The amount goes up 10% on Sunday as Sacramento borrows from taxpayers. Technically, it's not an income tax increase: You'll get the money back eventually.
Reporting from Los Angeles and Sacramento - 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."
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.
California will probably continue to collect the tax at a higher rate for many years -- or find an additional $1.7 billion to slice from a future budget, an unlikely occurrence. All workers who have state taxes withheld will see their paychecks shrink.
"Many families are sitting at their kitchen table wondering how they're going to make ends meet," said state Sen. Tony Strickland (R-Thousand Oaks). "At the same time, the state of California is taking a no-interest loan."
The provision is one of numerous maneuvers state lawmakers and Gov. Arnold Schwarzenegger approved in the summer to paper over the state's deficit. Many of the changes, including the extra withholding, were little noticed outside of Sacramento.
Savvy taxpayers can get around the state's maneuver by increasing the number of personal withholding allowances they claim on their employer tax forms, said Brenda Voet, a spokeswoman for the state's Franchise Tax Board.
"People can get out of this," she said, noting that most people would have to change their allowances through their employers. California's budget leaders are banking on the hope that most won't.
The increase is coming at a bad time for store owners, many of whom depend on the holiday shopping season to keep their businesses alive.
"I don't think there's any question it's going to impact consumers' spending," said Bill Dombrowski, president of the California Retailers Assn. "Any time you reduce people's disposable income, there's going to be a negative effect on the retail sector."
But Stephen Levy, director of the Center for Continuing Study of the California Economy, wasn't so sure.
"It's having a relatively small impact on people's income," Levy said, pointing out that many families will receive only $12 to $40 less each month.
Yet Erika Wendt, 28, of San Diego said she already lived on a tight budget: She rides her bike to work, for instance, to save on gasoline and parking costs.
"I am frustrated as this directly impacts my weekly budget -- what groceries I buy, how much I drive and can spend on gas," she said. "Now money will just be tighter, and I'm not sure where else I can cut back."
The extra withholding comes in addition to tax hikes the state enacted this year.
In February, state income tax rates were bumped up 0.25 of a percentage point for every tax bracket. The dependent credit was slashed by two-thirds. The state sales tax rate rose 1 percentage point. The vehicle license fee nearly doubled to 1.15% of a car's value.
Lawmakers and the governor also approved deep cuts to schools, social services and prisons to fend off one of the steepest revenue losses in California history.
Temporary budget bandages, such as the increase in withholding, were included at several points this year to avoid higher taxes and deeper cuts, said H.D. Palmer, a spokesman for the state Department of Finance.
Sacramento, meanwhile, is awash in red ink again. The state controller recently said revenue in the budget year already had fallen more than $1 billion short of assumptions. Outsize deficits are projected for years to come.
Such temporary measures as the withholding tax increase don't really fix the budget gap, "they just more or less hid it," said Christopher Thornberg, a principal with Beacon Economics in Los Angeles. "I call it a fraud."
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Cerulean
Penny Hoarding Member
USA
993 Posts |
Posted - 11/19/2009 : 13:34:42
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| When are Californians gonna wise up and move out? |
Sorting Map
2010 First Finds Contest
Are you a Buffalo Hunter?
Wanna take seignorage away from the Fed? Spend *any* coins!
We cannot afford this government.
Cerulean's Standing Offer: $3/lb shipped for foreign coins |
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Neckro
1000+ Penny Miser Member
Saudi Arabia
2080 Posts |
Posted - 11/19/2009 : 13:39:03
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| They are. They're just being replaced by Illegals |
Trolling is an art. |
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jonflyfish
Penny Hoarding Member
USA
693 Posts |
Posted - 11/19/2009 : 13:57:52
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| It's not a tax....it's seizure of property. |
The first panacea for a mismanaged nation is inflation of the currency; second is war. Both bring a temporary (and false) prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunities. |
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coppernickel
Penny Pincher Member
USA
131 Posts |
 Posted - 11/19/2009 : 14:09:40
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| Careful those folks have already left California, and moved next door, for the good life and now they want to destroy the good life and make it like California. |
Silver Monometalism is the most permanent and stable form of money the world has seen. Natural law and history prove silver value is best multiplied by gold and best divided by copper. It is only in this counterfeit currency time when the natural law appears suspended. |
Edited by - coppernickel on 11/19/2009 14:10:36 |
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El Dee
Penny Hoarding Member
USA
547 Posts |
Posted - 11/19/2009 : 14:12:47
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Since California already acts like a sovereign nation, they should start issuing their own paper currency and simply inflate their problems away!
Calibabwe
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Trust the government? Ask an Indian. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 11/19/2009 : 20:18:44
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Sheeple get what they deserve....
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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slickeast
1000+ Penny Miser Member
USA
2533 Posts |
Posted - 11/19/2009 : 21:40:16
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| They are getting pistol whipped. |
You don't have to be the BEST you just have to be.......SLICK
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billo
Penny Collector Member
293 Posts |
Posted - 11/19/2009 : 23:17:00
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| This is evil. For such a strong man, Arnold is such a wimp. No such thing as socially liberal and fiscally conservative. |
That's not a dollar, mate...THIS is a dollar.
http://www.sendcongressapinkslip.com/ |
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HoardCopperByTheTon
Administrator
USA
6807 Posts |
Posted - 11/19/2009 : 23:26:03
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quote:
Originally posted by El Dee
Since California already acts like a sovereign nation, they should start issuing their own paper currency and simply inflate their problems away!
Calibabwe
I think they already do that when they don't have any money to pay off the overwithheld taxes each year. They call them IOU's.
Gosh, it's such a chore to keep adjusting my withholding to the proper amount. They are trying to to take money out of my pocket that I need to hoard pennies. That just ain't right!  |
If your percentages are low.. just sort more. If your percentages are high.. just sort more.
Now selling Copper pennies. 1.6x plus shipping. Limited amounts available. |
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slickeast
1000+ Penny Miser Member
USA
2533 Posts |
Posted - 11/19/2009 : 23:30:32
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| Maybe HCBTT can loan 10% of his copper hoard to Cali. That will take care of the problems. |
You don't have to be the BEST you just have to be.......SLICK
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California to withhold a bigger chunk of paychecks
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