California income tax increase
As everybody knows, California is running out of money. Someday, they might stop spending, but in the meantime, they have an option not available to the rest of us: they’ll simply take more money out of our paychecks.
Since they can’t actually raise taxes without a lot of bother,
Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1 and through 2010.
But the lawmakers say this isn’t a tax increase. OK, how about calling it a compulsory interest-free loan from taxpayers to the state?
If you end up owing less than they took out, they’ll graciously give it back to you in 2011, when you file your return.
Unless, of course, they’ve run out of money again:
What happens come April if the state doesn’t have enough money to pay the tax refunds it owes its citizens? Will taxpayers get IOUs the way state contractors did last year when Sacramento ran out of money?
The WSJ article concludes with:
They claim to want to steal only from the rich, but their latest withholding ruse is showing that they’ll steal from anyone with a paycheck.
There is one thing we have to fight back with: increase your allowed exemptions. Here is the California withholding form DE 4. All employers have a means to change your state and federal withholding allowances.
Tax law is complicated, and the consequences are drastic and unpleasant, so be very careful if you decide to go this route. As a minimum, you should have last year’s return, and a complete record of this year’s withholdings before you change anything.