State to take bigger bite of your wages

[ilbegone]

State to take bigger bite of your wages

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