On July 28th of this year the California State Legislature passed Assembly Bill 17, by a majority vote, that required California employers, as of November 1st, to start withholding 10 percent more in state income taxes as an effort to relieve the state’s budget problems; Governor Schwarzenegger readily signed the bill into state law.
It’s part of a plan to accelerate tax collections so the state gets the money sooner. It is expected to artificially inflate state revenues by $1.7 billion through next June.
California state law requires a two-thirds vote in the state legislature to raise taxes. But wait-a-minute, this law was only passed by a majority vote. How can the state legislature get away with raising our taxes without the required two-thirds vote?
Brenda Voet, a spokeswoman for the state Franchise Tax Board, says it’s technically not a tax increase since wage earners will get their money back after April 15 when the state deducts any extra amount withheld from your paychecks.
Nevertheless, the effect will still feel like a tax because the state will in fact be withholding more out of each of our paychecks each pay period. This means you will need to adjust what you spend with each paycheck. Even though we allegedly will get the money back come April 15th, the state still can, and more than likely will, take our money again with the start of the next fiscal year.
The best way to describe this law is in effect, a forced, perpetual interest-free loan to the legislature in an effort to undue the economic mess it has gotten us into.
A rose by any other name is still a rose; and a tax by any other name is still a tax. Unfortunately, taxes offer no sweet smell for us to enjoy; only the sharp thorns that bleed hard working Californians dry, and drives employers out of the state.
This law needs to be challenged in the courts; it is an absurd attempt to circumvent the law and will of the people. A wise court should view this as a law that exceeds the legislature’s authority because it is by effect a tax, and was not passed into law by a two-thirds vote. Anything increasing what the state takes from your earned pay should at the very least, pass the two-thirds water mark that we the people have set.
The increased withholding comes on top of a 0.25 percent state income tax increase and a reduction in the dependent credit, also enacted as part of the state budget.
According to the Tax Foundation, California has the third worst business tax environment. California is also the third highest in personal income taxes.
If liberal ideology were true, this tax environment would place California as about the third most prosperous state. California’s expected budget deficit is expected to exceed $28 billion by the end of this fiscal year.
Withholding 10% more than it already does is not going to solve California’s $28 billion deficit. The solution is in cutting the obscene corporate and personal taxes that keep businesses out of California and those of us that actually work and pays taxes from spending in the consumer market place.
The reduction in corporate taxes will draw business back into California and allow them to hire more Californians. The reduction in personal taxes will stimulate more consumer spending. The combination of increased businesses and increased employees spending money will increase revenue collected by the state.
Wake up California; we have the potential to actually be the golden state.
Conservative HARTbeat 