From the Wall Street Journal: To help close yet another gaping budget deficit, Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1 and through 2010.
I don't wish to start a political discussion here though clearly what the state of California is doing is outrageous.
The lost interest (and opportunity cost) of the interest-free loan is small. For example, a married person earning $90,000 with two dependents would receive $25 less in monthly pay (latimes.com).
Would it make sense for some of us to submit modified W4s to avoid giving an interest-free loan to the state? However, the numbers are just small enough that adding an allowance may result in a penalty next year. But what the state is doing is unfuriating.
Message edited by: makingmovies on 2009-11-04 15:27:28 CST
My understanding of this (from previous articles) is that it simply increases the w/h for most workers, not their actual tax rate.
In other words, for that 90% of people who never pay attention to their w/h vs. their liability and use their tax refund as a windfall. They'll just get a smaller windfall next year.
I still feel it's an underhanded move, but not outright despicable.
ash78 said:My understanding of this (from previous articles) is that it simply increases the w/h for most workers, not their actual tax rate.
In other words, for that 90% of people who never pay attention to their w/h vs. their liability and use their tax refund as a windfall. They'll just get a smaller windfall next year.
I still feel it's an underhanded move, but not outright despicable.
Yes, it's true that this increases only the withholding, but those who hadn't intended to give an interest-free loan to the state may land up giving one (if your original witholding amounts approximately equalled your anticipated 2009 taxes)
ash78 said:My understanding of this (from previous articles) is that it simply increases the w/h for most workers, not their actual tax rate.
In other words, for that 90% of people who never pay attention to their w/h vs. their liability and use their tax refund as a windfall. They'll just get a smaller windfall next year. Shouldn't they actually get a larger windfall if more is withheld but the tax rates (and hence tax liability) stay the same.
The average Joe may not be paying attention to their w/h vs. their liability but I am sure he will notice a decrease in his net take home pay (which is what will happen because of the increased w/h) and that could have real consequence for the person living paycheck-to-paycheck.
makingmovies said:Would it make sense for some of us to submit modified W4s to avoid giving an interest-free loan to the state? However, the numbers are just small enough that adding an allowance may result in a penalty next year. But what the state is doing is unfuriating. Sure, I often go through 2 or 3 W4s a year. I believe California is like most states - you aren't subject to a penalty if your withholding is at least as much as the prior year's tax liability. So, after you file your '09 return with the FTB, figure out how much excess withholding you'll have in '10. Then you can look at the FTB's employer tax guide to figure out how much an additional allowance will reduce your withholding. Multiply that amount by the number of paychecks remaining in the year, and see if you're in the safe zone. You may be able to take more than one allowance, for that matter.
makingmovies said:From the Wall Street Journal: To help close yet another gaping budget deficit, Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1 and through 2010.
I don't wish to start a political discussion here though clearly what the state of California is doing is outrageous.
The lost interest (and opportunity cost) of the interest-free loan is small. For example, a married person earning $90,000 with two dependents would receive $25 less in monthly pay (latimes.com).
Would it make sense for some of us to submit modified W4s to avoid giving an interest-free loan to the state? However, the numbers are just small enough that adding an allowance may result in a penalty next year. But what the state is doing is unfuriating.
HAHAHAHAHAHAHAH. This is such a gimmick I just cannot stop laughing. HAHAHAHAHAHAHAHAHAHAH.
California couldn't even pay tax refunds right away last year, they issued fake money to cover them. Who in their right mind wouldn't adjust their withholding to make sure they don't have a refund due to them at the end of the year? Wait, I forgot, this is California, where they voted in the politicians that caused the states financial mess - if they cannot even vote for financially competent leaders how do you expect them to take care of their own finances.
huffboy said:time to terminate the terminator!It's not him, it's your buddies in the State Legislature who have been increasing entitlements for decades.
Message edited by: Xnarg on 2009-11-04 17:40:32 CST
wilesmt said:makingmovies said:From the Wall Street Journal: To help close yet another gaping budget deficit, Sacramento lawmakers have authorized a 10% increase in the amount of taxes withheld from worker paychecks starting November 1 and through 2010.
I don't wish to start a political discussion here though clearly what the state of California is doing is outrageous.
The lost interest (and opportunity cost) of the interest-free loan is small. For example, a married person earning $90,000 with two dependents would receive $25 less in monthly pay (latimes.com).
Would it make sense for some of us to submit modified W4s to avoid giving an interest-free loan to the state? However, the numbers are just small enough that adding an allowance may result in a penalty next year. But what the state is doing is unfuriating.
HAHAHAHAHAHAHAH. This is such a gimmick I just cannot stop laughing. HAHAHAHAHAHAHAHAHAHAH.
California couldn't even pay tax refunds right away last year, they issued fake money to cover them. Who in their right mind wouldn't adjust their withholding to make sure they don't have a refund due to them at the end of the year? Wait, I forgot, this is California, where they voted in the politicians that caused the states financial mess - if they cannot even vote for financially competent leaders how do you expect them to take care of their own finances.
This is true, but a large portion of us "voting in" crappy representatives is due to the gerrymandering of districts here. It's probably the 2nd worst state as far as gerrymandering. The budget crisis is partly due to this, and also due to the stupid state constitution that requires every tax to be voter-approved and any hair-brained new spending bill approved by voters to be carried out by legislature.
As such, every year we approve tens of millions in new spending on stupid, short-sighted ideas and reject tens of millions in taxes needed to cover it. Thus, we are screwed. Democracy works when you have representatives determine things for you, not when every single tax or spending item is voted on by the entire state.
The governator has done a good job passing prop 11 to correct the gerrymandering issue (which undermines some of the core necessities of democracy), but unfortunately we won't see the benefits of that for probably a decade and we still need to correct the state constitution to stop this endless cycle of overspending.
Message edited by: Trojan35 on 2009-11-04 18:27:26 CST
Xnarg said:huffboy said:time to terminate the terminator!It's not him, it's your buddies in the State Legislature who have been increasing entitlements for decades. Or maybe it was the legislatively-referred constitutional amendment that requires a balanced state general fund budget that was approved by over 70% of the voters in 2004?
This is another kick the can solution in California that can't possibly fix their deficit problems... Arnold might as well tell his famous quote to tax payers: "I'll be back."
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
