California Gouges Employees for Interest-Free Loan
California, desperate for money, has made employees an offer they can't refuse: starting this week, the State will withhold 10% more taxes from employees' checks. That's not just State employees, but every employee in the state.
Essentially, that's a non-consensual, interest free loan. If a private party did that, they'd call it extortion.
In theory, taxpayers will get a refund when they file their tax return is April. But as we've seen in the past, just because California owed you money doesn't mean you'll actually get it. In previous years, the State has issued IOUs.
Here's a tax tip for California taxpayers: you can give your employer a revised Form DE-4 showing more exemptions, which will cause your employer to withhold less.
Tip: Sue
Time's latest cover story is "Why California is still America's Future(and why that's a good thing to).
California has always been the drawing board of most of the worst trends in America. plenty of pleasant weather and wide roads: they filled it with sprawl and shopping malls. california is the birthplace of McDonalds, disneyland, and automobile based smog. the faster the sprawl goes up, the faster "urban" decay sets in. California is the birth place of gangsta rap and so much hollywood bullshit. California launched reagan's political career and also gave us Richard Nixon. California had enough federal money, and gold-chasing settlers, oil, and timber and topsoil to have an easier time of it. so it became sophisticated earlier. in both the private sector and public sector workers will work to increase the prestige and exclusiveness of their professions by tacking on the qualifications to do that work. this also drives wages up. they need support, so they also try to drive up the wages of guys lower on the latter. California is hopelessly dysfunctional as a result of hypersprawl and hyper-sophistication.
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Sue also suggested the LA Times article, suggesting that the high-tax, high-services model of state government has failed not only by conservative measures, but by liberal measures as well-- it just doesn't work. Of course, LA Times lists to the right, but what they say has some merit.
http://www.latimes.com/news/opinion/la-oe-voegli1-2009nov01,0,825554.story
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Sue adds:
I made a California state withholding comparison table from the withholding schedules for Jan-Oct 2009 and revised Nov-Dec 2009:
http://www.edd.ca.gov/pdf_pub_ctr/09metha.pdf
http://www.edd.ca.gov/pdf_pub_ctr/09metha_novdec.pdf
The increase is 10% across all income levels.
This table includes single persons, dual income married (both spouses work), or married with multiple employers *and* biweekly payroll periods. There is a different withholding table for married one income and for weekly payroll periods. I didn't do comparisons for the latter.
Here's one example:
A person making $80,000 a year, or $3,076.92 per bi-weekly pay period
At 2 withholding allowances, was withholding $184.05. This goes to $202.45 in November & December.
To compensate for the state taking your money, you need to submit to your employer a DE-4 showing 6 exemptions ($185.73 withholding) or 7 exemptions (181.55 withholding).
DE-4 is here:
http://www.edd.ca.gov/pdf_pub_ctr/de4.pdf
To summarize: A California employee claiming 2 exemptions may need to claim as many as 6 or 7 to reduce their withholding to pre-November levels.
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