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Old 10-27-2009, 02:14 PM
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ilbegone ilbegone is offline
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Default State to take bigger bite of your wages

State to take bigger bite of your wages


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California ups income tax withheld in each pay period

By CRAIG CURRIER
Valley Press Staff Writer
October 27, 2009.

Beginning next week, workers can expect to see smaller paychecks as the state government increases the amount of income taxes it withholds.

The reason is legislation passed last summer - largely unnoticed - that increases the amount of income tax withheld each pay period, though it does not change how much an employee will owe for the year.

The change amounts to a 10% increase from what was previously paid, meaning if a person owed the state $1,000 last year, the state's Franchise Tax Board will up that to $1,100, adjusting the rate at which the money is extracted beginning Nov. 1.

For workers who make $500 each week, or $12.50 per hour, the change amounts to $1 each week, while people who earn $2,000 per week will see a difference of approximately $14.

State Sen. George Runner, R-Lancaster, and Assemblyman Steve Knight, R-Palmdale, both voted against the bill, but because no actual tax increases were involved, it passed on a simple majority in both the Assembly (46-33) and the Senate (22-16).

"You're hard-pressed to not call this a tax increase when the reality is these individuals are going to live with less than they did before," Runner said.

Because the tax rates have not changed, workers will be owed the money come April, but Runner said he is not convinced the state will repay the entire sum in a timely manner.

"There is no guarantee," he said. "The best people can do is adjust their withholding so that it equals what they will owe."

Runner said the bill was strongly opposed and was among others that slipped under the radar in July as lawmakers worked feverishly to meet budget requirements.

"It's one of those issues that was on the list of items but didn't have a direct impact at the time, and it was never listed as a tax increase," he said. "It's really just borrowing without asking permission, nor paying interest."

Runner said the one-time claim attached to the bill does not make it excusable.

"My view is if the majority of legislators are willing to do this once, they will continue to do it in order to facilitate their spending habits," he said.

http://www.avpress.com/n/27/1027_s2.hts

Last edited by ilbegone; 10-27-2009 at 02:18 PM.
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Old 10-27-2009, 05:27 PM
Rim05 Rim05 is offline
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Pretty soon we will be working of the State and Federal governments.
I got a notice from my credit union that my credit amount has been lowered. They said it had nothing to do with my credit rating so I am wondering what is happening. I have a Penny's credit card that I never use but I got a notice that the interest charges are going up and there will be a shorter time period to pay. There was some other stuff so I am cutting it up. I just wonder what is starting to happen.
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Old 10-27-2009, 05:47 PM
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Jeanfromfillmore Jeanfromfillmore is offline
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Originally Posted by Rim05 View Post
Pretty soon we will be working of the State and Federal governments.
I got a notice from my credit union that my credit amount has been lowered. They said it had nothing to do with my credit rating so I am wondering what is happening. I have a Penny's credit card that I never use but I got a notice that the interest charges are going up and there will be a shorter time period to pay. There was some other stuff so I am cutting it up. I just wonder what is starting to happen.
Remo, what is happening is everyone is tightening up on credit, and it is as you wrote, it doesn't have anything to do with your credit rating. All my credit card limits were reduced and I have a great credit rating. The real kicker is that banks like Chase are really screwing their cardholders. If you used or transferred money to get those low interest rates, around 2.9 to 5.9 on a fixed rate till the balance is paid off, you will now be required to pay 5% of the principle each month instead of the usual 2%. This will more than double your monthly payment. And if you ask the bank to lower your monthly payment, they will tell you they will do it if you agree to a higher interest rate. Mind you this is the same bank that received all our tax dollar money in the bailout. There's a new law that takes affect in January that requires banks to use your payments to pay off the higher interest charges on your card first and not allow them to be pushed to the back as they've been doing. It also doesn't allow them to up your interest without giving you a much longer notice. There's probably other new requirements that I don't know about, but those are two that I do. The banks and credit lenders are scrambling to beat the deadline and screw their customers before the deadline.
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Old 10-28-2009, 04:07 AM
Rim05 Rim05 is offline
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Have you checked the interest earned? I found out that on a CD of about $17,000 Chase is paying .25%. I also know of at least 2 banks that pay less than 1% on what we used to call a pass book account. The only time I use a card anymore is if I order plants or bulbs and that is not often.
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Old 10-28-2009, 08:46 AM
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ilbegone ilbegone is offline
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Originally Posted by Rim05 View Post
Have you checked the interest earned? I found out that on a CD of about $17,000 Chase is paying .25%. I also know of at least 2 banks that pay less than 1% on what we used to call a pass book account. The only time I use a card anymore is if I order plants or bulbs and that is not often.
You are also taxed on that money while it loses value.

I'm not sure what the current true cost of living shift is now or where it's going, but way back when I saw the way it's stacked against us.

Let's say that you deposited $25,000.00 into a checking account and the interest rate is 3%. Inflation rate is 7%. Your money loses value, yet you are taxed on the "income" the bank pays you.

We can look at Social Security as well.

Not only has Congress pilferred Social Security, I believe the money in our accounts are listed in the dollar amounts for when they were collected. Take the dollar figure of the total for each year you and your employer contributed to Social Security, use an inflation calculator to find what those dollars were worth when they were contributed, and check that against your current account statement total. That will be an eye opener.

I believe that the game is rigged so that if you are responsible and live within your means, you are punished because the fat cats don't have as much leverage to milk you. As well as all those mayonnaise jars of green backs buried in the back yard becoming worthless.

However, if you live your life up to the eyeballs in debt while making the right investments, writing off all the right tax avoidances, and deftly stepping between corporate financial traps, you can retire comfortably.

Unless the greed driven bubble pops before you are ready.

There's the old joke about a person spending all his free time studying the stock market and invested $1,000.00 in a popular telecommunications stock of a decade or two ago, which went belly up. He lost all his money.

His neighbor and coworker bought $1,000.00 of canned beer and spent all his spare time watching sports on Tv. When he swilled his last can of beer, he was out the $1,000.00 as well, but at least had the cans to to turn in for their recycling value.
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Old 10-28-2009, 06:32 PM
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Jeanfromfillmore Jeanfromfillmore is offline
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Originally Posted by ilbegone View Post
You are also taxed on that money while it loses value.

I'm not sure what the current true cost of living shift is now or where it's going, but way back when I saw the way it's stacked against us.

Let's say that you deposited $25,000.00 into a checking account and the interest rate is 3%. Inflation rate is 7%. Your money loses value, yet you are taxed on the "income" the bank pays you.

We can look at Social Security as well.

Not only has Congress pilferred Social Security, I believe the money in our accounts are listed in the dollar amounts for when they were collected. Take the dollar figure of the total for each year you and your employer contributed to Social Security, use an inflation calculator to find what those dollars were worth when they were contributed, and check that against your current account statement total. That will be an eye opener.

I believe that the game is rigged so that if you are responsible and live within your means, you are punished because the fat cats don't have as much leverage to milk you. As well as all those mayonnaise jars of green backs buried in the back yard becoming worthless.

However, if you live your life up to the eyeballs in debt while making the right investments, writing off all the right tax avoidances, and deftly stepping between corporate financial traps, you can retire comfortably.

Unless the greed driven bubble pops before you are ready.

There's the old joke about a person spending all his free time studying the stock market and invested $1,000.00 in a popular telecommunications stock of a decade or two ago, which went belly up. He lost all his money.

His neighbor and coworker bought $1,000.00 of canned beer and spent all his spare time watching sports on Tv. When he swilled his last can of beer, he was out the $1,000.00 as well, but at least had the cans to to turn in for their recycling value.
What is the incentive to save nowadays? Answer:None. That is what is really scary. But it would surprise you at how many people do not have a clue to the situation we as a country are in. They believe that a white knight is going to ride in on his beautiful stallion and save the day, so to speak. All I know is that those with the skills to survive and understand the situation will fare well, and those that don't will be in for a rude awakening. Just tell them that catsup and hot water got a lot of people by in the 30's. Don't know is hot sauce or salsa will work though.
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Old 10-29-2009, 05:19 AM
Rim05 Rim05 is offline
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I passed a Chase bank yesterday and ask for a copy of their rates. No one would give me one, I had to see an agent. I finally said ok. I ask the person why I could not just get a copy. Answer was they were just starting the new rates yesterday and wanted to be sure people understood them, you just know I told her I 'do' know how to read a statement. Bottom line is CD Specials for a $10,000 7mo acct the interest rate is 0.75. That is just a sample. The banks are still making out better than OIL.
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