Monday, November 2, 2009


Those of you who keep up with this blog know that I have an extremely low regard for the sleazy business practices of Monster Cable. But now, an organization has sunk far, far lower than them and I just had to get back up on the soapbox to rant about this.

The award goes to: Our California government. Now that they have squandered all of our tax dollars, they have decided to leech even more out of us by declaring a 10% increase in the amount that is withheld from paychecks to pay for state income taxes.

Mind you, this is not an increase in taxes, it is only an increase in the amount that is withheld as an estimate for what you will owe for the 2009 tax year. For example, let's say you have $100 per month taken from your check for California income tax.

That amount is now going to be 10% higher, i.e., $110.

Let's say that at the end of the year when it comes time to file your tax return, you owe $1,200 in taxes. Since you had $100 per month withheld for your taxes, that would total $1,200 for the year and you would be even. What was withheld would be equal to what you owe.

Under this new sleazy plan, you would have $110 wittheld per month from your check, for an annual total of $1,320. Since there is no tax increase, you would owe $1,200, and thus you'd be entitled to a refund of $120 after filing your tax return.

So what is the point? Why should you pay more money than what you really owe, only to get it back later on?

As the state acknowledges, it is in effect an interest-free loan to them of YOUR money from the time it is withheld from your paycheck until the time you get it back as a refund.

That is, assuming that the state has any money to pay you that refund when the time comes.

Now, if this isn't a blatant ripoff and egregious outrage, I don't know what it.

At least with Monster, no one forces you to buy their overpriced products. If you are dumb enough to part with your money when you could get something just as good for much, much less, that is your business. And I have no quibble about the quality of their products; they make decent stuff, just overpriced.

But when it comes to income taxes, the bandits of the State of California leave us no choice. This is involuntary. And, unlike Monster, the quality of what you get for your money from our sorry state is to say the least, lacking.

When a bank takes your money, they supposedly earn a return on that investment. So let's say you give them $1,320. They will earn a profit on it so that the $1,320 is there plus a profit margin (which that plus a federal subsidy will then be used to pay employee bonuses). But the idea is that they do use the money to earn money. Otherwise, they could not remain in business (theoretically, that is; let's just assume they don't get bailed out).

But when the State of California takes your money, there is no such thing as a return on investment. It gets squandered on more of their useless pet projects.

Supposedly this increase will result in an additional $1.7 billion of revenue for the state. But it isn't really revenue because it will have to be repaid. It is only a loan.

So how does that help things? Even though it is an interest-free loan, do you really have confidence that our wonderful state is going to have the money to pay you back at the end of the year?

I sure don't.

What a scam. Here are the possibilities:

(1) They increase our income taxes by 10% so voila, this extra amount that has to be withheld will pay for the increase in taxes;

(2) They issue worthless warrants or IOU's because they will have spent all that extra money and don't have it any more;

(3) They secede from the United States and become their own country, at which point they begin printing their own money to pay you back.

This is just another stupid accounting trick that beats anything that could ever appear on a David Letterman list. It is in the same category of silliness as their moving some expenses from one fiscal year to another to make it appear that the budget was being improved when really, it only meant I will gladly pay you on Tuesday for a hamburger today.

In substance, nothing has changed except the people of the state become poorer.

Actually, I have no one to blame but myself for being stupid enough to live here.

As for the YouTube, I know I've posted this same one before but if the shoe fits..


Brien said...

That Network clip is an absolute classic!! LOL!

Rickie Miyake said...

Peter Finch certainly deserved the Oscar for that performance, didn't he? And I tell you, reading about all the boneheaded things our boneheaded politicians do, it makes me feel the same way he does!!! Except if it was me in his place I'd be urging everyone to get up and throw your television through the wall! Hmm.. but then if they did that they wouldn't be able to hear any further instructions from me.

Anonymous said...

Very interesting post. There is an solution if you are reporting less than your allowed deductions on your Federal W-4. Do not adjust your W-4 but submit a DE-4 from here:
The reason is that adjusting your W-4 will cause a change in both federal and state withholding. You are not allowed to adjust your state withholding by declaring greater deductions than you are legally allowed. There is a $500 fine. Personally we are at the stage where we declare S-0 on both our forms and normally have to make quarterly payments. I ran the numbers and will leave my state withholding alone but will cease payments for this year and next.

BTW, I get paid via warrants and have converted them to electronic funds transfers.
One last thing. Thanks to the governator for our deficit. If he had not cut the vehicle taxes by half our budget would be balanced. He cut the tax on his hydrogen powered Hummer, killed the treasury and had to reinstate the tax.

Rickie Miyake said...

You actually get paid in warrants? Well I tell you, that is just one step away from just what I said - California secedes and starts printing its own currency! (California tumbles into the sea / that'll be the day I go back to Annandale -- Steely Dan). I think the Governator inherited a lot of problems. Cutting the vehicle tax may have contributed (something which I think is nice for me but stupid in the long run for everyone as a whole) to the mess but I think there's a whole lot more that is haywire than just that.