Theft By Any Other Name

Let’s try a little experiment.  The next time you have a bill due, whether it’s a utility bill, your mortgage or rent, credit card payment, etc don’t pay it.  Instead, send an IOU.  Things wouldn’t end well for you, would they?

Now imagine an entire state government doing the same (only calling them registered warrants, presumably to soften the sting) and you’ll have some grasp of the shenanigans the California Controller’s office is trying to pull on state taxpayers.  Via state Controller John Chiang:

“My office has projected that, in approximately 60 days, there will be insufficient cash available to meet all expenditures reflected in the 2008-09 Budget Act,” stated a Tuesday letter from Controller Chiang to the directors of all state agencies. “To ensure that the State can meet its obligations to schools, debt service, and others entitled to payment under the State Constitution, federal law, or court order. California may begin, as early as February 1, 2009, issuing registered warrants…commonly referred to as IOUs…to individuals and entities in lieu of regular payments.

There’s only one real way to describe this move: theft.  This money the state’s sending script out on is money payed by taxpayers as a buffer to ensure they don’t owe the state money.  Come tax time any money above what they owe is, quite simply, theirs.  Not the California’s, not their employer’s, not their next door neighbor’s, theirs.

It’s bad enough that tax agencies treat this overflow as a sort of zero-interest loan, now they’re treating it as a zero-interest loan with no payment plan.  The worst part, it’s too late in the year for people expecting a refund to adjust their tax deductions.

Those who could be most affected are taxpayers who routinely plan for large refunds as a means of saving for anticipated expenses, such as property taxes which are also due in April. But with notice coming at year’s end, there is not time for those taxpayers to adjust their withholding or take other steps to try to capture their return in advance from the state’s coffers.

Nice, no?

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