ReetzAlity.com

California has just increased income tax withholding by ten percent to cover a budget deficit. The California government is characterizing the increase as a “compulsory loan” rather than a tax because folks will get the money back. Unbelievable. Let’s put this in perspective. Let’s say you have a budget shortfall in your family budget. So, acting responsible, like for example, government, you go over to your neighbors and take some of their money. They scream and call it a theft. You assure them that you will pay them back so it’s not theft, it’s a, what’s the term, a compulsory loan. Folks you must see what California is doing for what it is; not a tax, not a compulsory loan, nothing but a unilateral theft. And given the circumstances, the old saying that innovation, bad and good, starts in California and moves east, you should be extremely worried. You also should not stand for it. What you should do is a compulsory collateralization, take something from the government and if they get upset, tell them you were simply employing a compulsory collateralization for their compulsory loan. Tell them that when they pay you back, you’ll give them back their collateral. Any way you look at it, it’s time to civilly revolt and over throw, again Civilly Heir Obama, the current players in government. We can call it, let’s see, let me think of a legal term, got it. We can hold them responsible based upon the concept of “anticipatory breach.” In other words, we know that they are going to breach their duties so we hold them accountable with a legitimate legal theory that embraces the concept that you don’t have to sit back and wait for somebody to complete their breach, you can hold them in anticipatory breach. Uh oh, I messed up. You can’t anticipate something that’s already happened, like our governments absolute breach of its duty to follow the constitution. Here’s the read. Pour yourself a drink or draw a warm bath, you’ll need it.

CALIFORNIA TO WITHHOLD A BIGGER CHUNK OF PAYCHECKS!

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.

By Shane Goldmacher and W.J. Hennigan

October 31, 2009

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.”

shane.goldmacher@ latimes.com
william.hennigan@ latimes.com

Back to Reetzality. Unbelievable in all respects. And these morons do it with a straight face. We cannot tolerate this any longer. If we do, we are betraying our families and loved ones, and that’s a gig a decent person shouldn’t participate in. Anyway, I’m going out to get my anticipatory compulsory collateral for the compulsory loan I’ll have to give when this idea heads east. I’m kidding Heir Obama, I’ll only revolt with my vote. Now that’s catchy. (See Virginia and New Jersey)

That’s my Reetzality for the day.

Thanks for the Read.

Brett Reetz