California to withhold a bigger chunk of paychecks | Hacker News Reader

California to withhold a bigger chunk of paychecks

latimes.com

27 pointsabsconditus26 comments

This is absolutely unacceptable. I'll be adjusting our withholding allowances to account for the change.

California needs to spend less, not quietly raid my bank account.

The "10% extra" figure sounds like a lot -- and from one standpoint it is -- but later in the article it mentions that this amounts to an extra $20/month for a $50K/yr earner.

So while I'm not a fan of "quiet" tax levies like this, and while I'm not under the illusion that taxes, once raised, are ever really substantially lowered, and while I'm skeptical enough not to trust that we can expect it to be promptly or fully refunded come April ... I also don't see it as a tremendous disaster.

California is one of the most progressive states in the union. That progressiveness -- including some of the top public school districts in the country -- comes at a price: higher taxes.

Also, it's California's own taxpayers that have driven the various ballot measures that have left California struggling. Seems somehow wrong to turn around and place all of the blame for the state's budget woes on elected officials; even if they are mostly self-serving and fairly useless, they weren't the ones that passed the requests for lots more money without thinking about how to pay for it.

I don't think I get it, then. 10% of $2000 is $200. How is this 10% extra withholding if they're only taking $17/mo from someone who makes $50k? That's slightly under 1% of the average monthly pay.

Someone making $50k would be getting $4167/month before tax. If an increase of 10% on state income tax is costing them $20/month, that means they used to be paying about $200/month in state income taxes, or about 4.8%. Afterwards they'd be paying $220, or about 5.3%.

Looking briefly at California's income tax brackets those percentages seem to be about right.

That still doesn't make sense. Shouldn't it be an increase to 5.8% from 4.8%?

Well, you can express it any way you like. Math is flexible that way!

Note that from 4.8% to 5.3% is actually an increase by 10%, namely: 0.048 * 1.1 = 0.053, or 4.8% * 110% = 5.3%.

I imagine you're looking at it and seeing the difference between percentages (0.5%), not the ratio between them (1.1), a distinction that trips people up not infrequently.

California's public education program has always been consistently ranked near the bottom last since I was in elementary school. (http://www.wavenewspapers.com/news/regional/37673589.html)

> California is one of the most progressive states in the union. That progressiveness -- including some of the top public school districts in the country -- comes at a price: higher taxes.

The assumption that the cost is providing benefits may not be true.

http://www.latimes.com/news/opinion/la-oe-voegli1-2009nov01,...

For comparison purposes:

http://www.uschamber.com/icw/reportcard/default -- Note that Vermont and New Hampshire both do very well overall.

http://en.wikipedia.org/wiki/State_tax_levels -- Note that VT and NH are at opposite extremes of state tax revenue per capita.

I'm going to go out on a limb and say that tax rates have little to do with education quality.

Think of it as a forced, interest-free loan: You'll be repaid any extra withholding in April.

Yeah, sure. They are already paying their debts with IOU's. They didn't pay people's refunds last year, was it? This seems pretty wrong to me.

Are they going to repay it with another loan? Who is going to loan them money? The only way out of the debt spiral is to stop spending, not taking on more debt.

They gave IOUs for refunds, then paid them fairly quickly. I filed mine electronically on April 10th or so, and received my refund within a few weeks--it's not like they just didn't pay. I don't disagree on the whole, though.

Tax filings start in a couple months, the deadline is just about 5 months away. At best this is just a very temporary stopgap. If they can't cut the budget now and can't float a bond issue now what makes them think they'll be able to do so then?

"Forced, interest-free loan" is Orwellian. It's theft. Setting aside any moral considerations surrounding taxes, these words are the semantic equivalent of CA saying "We're taking your money now, like it or not, and hopefully we'll repay it in a few months." It's not a tax, it's not a fee, it's stealing and it's easy because of the whole notion of withholding. To stand against it would require that both employer and employee perform simultaneous disobedience that is sure to bring the wrath of the IRS.

If we really want to see rage against taxation we'd eliminate withholding and all taxes would be rolled into a single lump sum that the taxed would have to pay the week before election day.

How long before the state IRS auditors need to start, and then stop, accepting IOUs as payment for their work?

I don't understand how one of the largest states, which can supposedly benefit best from economies of scale, with one of the highest tax rates, can have such serious liquidity problems.

The problem is that economies of scale generally apply in large Democratic states. Economies of scale are by their nature commercial. The only item that seems scales in CA is subterfuge.

Because in California budgetary politics, one party insists on raising taxes to meet expenditures while the other party insists on cutting expenses to meet revenues, and in the true spirit of compromise the only thing they can agree on is doing neither, which ends up being the worst possible choice.

At this point they should probably be doing both.

While I agree with your sentiment on the ineptitude of our politicians, what actually happened was somewhat different. We as voters passed a bunch of propositions that increased spending while limiting the government's ability to tax. If our politicians are to be blamed, it is for not howling loudly that we have tied their hands.

Most of the blame falls on us citizens who went along with a system that doesn't work. Direct democracy is a cute thought, but in practice it spreads the responsibility too thin and fatally hampers a leader's ability to maneuver or veto obviously contradictory measures.

Perhaps now would be a good time to unwind this mess.

We need to raise property taxes and only exempt the seniors!

Direct democracy works exceptionally well in Switzerland, and the citizens vote four times a year there.

Time to state the obvious: the Dems have controlled both houses of the state legislature for decades, and they shovel money to the state employee unions in exchange for block voting. And it works.

Then there are all the regulations they pass that make CA the worst rated place in the US to do business, driving businesses and their tax money from the state.

I doubt that the entire budget is dictated by direct-vote propositions. To abuse the analogy, the government could probably get its hands free if not for the left and right hands each being more interested in keeping each other tied up than in getting lose from the bindings.

That said, are you mad? Holding the citizens as a whole responsible for the actions of a democratic republic? Surely, you jest. Besides, blaming voters is no way to get elected; it's always the fault of the other party.

The problem is that the tail wags the dog in California.

The California Constitution requires a 2/3 majority to pass the budget. The demographics of the state virtually guarantee a 60-40 split between Democrats and Republicans. It is virtually impossible to get any Republican to vote for a tax increase. Ever. It is hard to get Democrats to accept cuts to social programs.

This is a guaranteed mess and the budget process is therefore painfully difficult. Unfortunately the Republicans are so good on party unity that in the end the Democrats, despite their significant majority, wind up compromising far more.

To add to this mess, the voters can and do pass any measures they like through the referendum process with a simple majority vote. Once the voter initiatives have reduced taxes (prop 13 is a famous example) or mandated spending (prop 98 for instance), the legislature has to work around the resulting restrictions. Based on their votes, California voters have been pretty much oblivious to the effects of their decisions.

Ain't democracy wonderful?

As ridiculous as the whole idea is, it's almost as absurd to imagine this being some terrible hardship. The article makes it sound like it'll be a big deal to a lot of people but it's, what, maybe $30/month for someone with a pretty comfortable income? If that's a serious concern, then it's not just the state government with a budgeting problem...

Then again, maybe the purpose is just to get Californians upset to distract them from noticing that noone's actually solving the problem.

Yes, it's just a fraction of a percent. The ratio goes up if you count disposable income only, but I can't imagine it being such a big deal.

This just sounds like an employer with a gambling problem, he's taking cuts off his workers paychecks and claiming they'll get paid out. Well one question; what happens when he hits rock bottom and loses the business?

Given how heavily the Californian budget process is constrained I'm not sure they had any better options.

Hopefully this can serve as an added impetus to finally reforming the broken budgeting system there.

Damnit.

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