California Tax Mess Exposed: Hiking Some Taxes, Not Collecting Others
by Capitol ConfidentialCalifornia leaders including Gov. Arnold Schwarzenegger have reportedly agreed a new budget deal, but as the state attracts jeers for its lateness in taking concrete steps to pass a budget, some are booing its leaders for their willingness to sign off on tax hikes when it is being reported that California is owed about $1.4 billion in tax revenue already collected by businesses from consumers, but never remitted to the state.
The LA Times reports:
California is owed nearly $1.4 billion by auto dealers, restaurants and other businesses that collected sales taxes from buyers but didn’t pass the money along to the state — a situation that is aggravating California’s budget crisis.
The tab is up about 25% from a year ago and has almost doubled since 2007, state records show.
That money could make a significant dent in the state’s $19-billion budget gap. Watchdog groups say the state’s failure to collect it is particularly galling because much of the tax money has already been paid by consumers — it just hasn’t been turned over by merchants to the state Board of Equalization.
“All of us want people to pay the tax they legally owe before lawmakers go looking to raise taxes,” said Jean Ross, executive director of the California Budget Project, a Sacramento nonprofit that advocates for lower-income Californians.
Indeed, reports indicate that Republicans in the Golden State have reluctantly signed off on one tax increase as a possible pathway to getting more tax cuts included in any budget. According to the Sacramento Bee, as of last week, GOP leadership had agreed to a delay in implementation of a net operating loss (“NOL”) deduction originally intended to begin this year until 2012– a move that would supposedly bring in about $1.4 billion.
But some skeptics of the plan, who wish to avoid all tax hikes in their totality, are arguing in light of the LA Times report that this delay is unnecessary, given that $1.4 billion in sales taxes is currently not being collected by the state, but should be. They charge that nixing the NOL deduction could have a negative effect on the state’s economy, which ought not be further risked given these circumstances. California is currently suffering from 12.4 percent unemployment.
In addition, concern remains that California Democrats could continue to pursue implementation of a tax scheme whereby out-of-state retailers who maintain no operations in California are forced to collect and remit California sales tax despite that fact simply because they advertise with websites based in the state. Critics charge that scheme is both unconstitutional and would possibly aggravate California’s economic woes (as sites like Overstock.com have curtailed paid marketing within states that have pursued a similar scheme). However, they also charge that looking for more solutions focused on sales tax collection and remittance is an ironic move given the fact that the state is already failing to make those who clearly and indisputably owe sales taxes pay up.
The California legislature is set to vote on the budget deal on Thursday.
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60 Comments
Whats new? California is such a mess, has been for a very long time. Maybe we will be lucky and the big one will rid us of the cesspool.
It would appear that the maximum size of big government has been reached as defined as California.
I suggest we reduce every big government to no larger than California. At that point the corruption becomes circular.
All those companies that are withholding sales tax they collected on behalf of the state will someday become property of the state,that's how it works,the state will keep track of every dollar owed add interest and penalties that after years of nonpayment make it impossible to payback,so the state comes in and takes EVERYTHING.
Taxation is not the solution but all politicians automatically resort to more taxes to pay the deficits that have been ran up by their errors in judgment on social programs. When you have a one size fits all govt you only get one size fits all solutions. California is not the only state that is in dire trouble financially they just happen to be the first to edge of the cliff, but are they not always the first in all the bad decisions?
Speaking of California, yesterdays LA Times had a story about California welfare recipients withdrawing money (with their ACCESS cards)in Las Vegas, Miami, Hawaii…………..and Cruise Ships. $12 million dollars withdrawn on the Las Vegas strip.
http://articles.latimes.com/2010/oct/04/local/la-...
It must be nice………….get your welfare money, and head to the casinos.
With all these stories about how gov't doesn't work and how taxpayer dollars are wasted, please explain to me why these idiots shouldn't be tarred, feathered, ran out on a rail, and banished forever?
What upsets me about this State, is these Hollywood rich elites who have the money, leave the State to another mansion for several months so they don't have to pay taxes.
Oprah is 1 who does this. I heard this on Fox before.
It just seems that they should pay their share of taxes regardless of where they live..
If I were to leave my home and go somewhere else for a few months, I bet the IRS would make me pay taxes in both places. Is that some messed up law there?
The same rich people who keep voting for this corruption, can afford to leave it any time they want.
CALIFORNIA'S ILLEGAL ALIEN MESS…
There will be NO fixes until the California legislature objectively addresses the illegal alien problem that are sucking the state's social services dry.
Your tax dollars at work,just think about the benefits? This is how it works in the liberal brain,these poor souls,who because they are poor are forced to take their food stamp money and gamble it away,they lose their money at the crap table have no food or food stamp money left,now desperation sets in so they decide to steal something so they can eat,they get caught,that keeps the police in jobs,they go to court but can't afford a lawyer so one is appointed,that keeps lawyers employed,they get sentenced to jail,that gives jobs to the jailers,you see how beneficial it is to the economy?
"Republicans in the Golden State have reluctantly signed off on one tax increase as a possible pathway to getting more tax cuts included in any budget."
And that is called paying the Dane-geld;
But we’ve proved it again and again,
That if once you have paid him the Dane-geld
You never get rid of the Dane.
Rudyard Kipling
It's a vicious cycle. And I'm sure it's happening everywhere………..not just California.
One HUGE RACKET!!!
Oh it gets better than that.
Welfare recipients get $12,000 from strip club ATMs
The interest charged is usually fair. The penalties are outrages and make the Mafia look like Boy Scouts!
David Barton – 07/22/2010
Tea Parties – Same Song, Second Verse
America’s first Tea Party in 1773 was not an act of wanton lawlessness but rather a deliberate protest against heavy-handed government and excessive taxation. Its leaders took great care to ensure that nothing but tea was thrown overboard – no other items were damaged. The “Indians” even swept the decks of the ships before they left.
Tea Parties occurred not only in Boston but also in numerous other locales. And those who participated were just ordinary citizens expressing their frustration over a government that had refused to listen to them for almost a decade. Their reasonable requests had fallen on deaf ears. Of course, the out-of-touch British claimed that the Tea Parties were lawless and violent, but such was not the case.
Interestingly, in many ways, today’s Tea Parties parallel those of long ago. But rather than protesting a tax on tea, today they are protesting dozens of taxes represented by what they call the Porkulus/Generational Theft Act of 2009 (officially called the “American Economic Recovery and Reinvestment Act”). For Tea Party members (and for most Americans), that act and the way it was passed epitomizes a broken system whose arrogant leaders often scorn the concerns of the citizens they purport to represent.
Tea Party folks agree with the economic logic of our Founders.
“To contract new debts is not the way to pay off old ones.” “Avoid occasions of expense…and avoid likewise the accumulation of debt not only by shunning occasions of expense but by vigorous exertions…to discharge the debts.” GEORGE WASHINGTON
“Nothing can more [affect] national credit and prosperity than a constant and systematic attention to…extinguish the present debt and to avoid as much as possible the incurring of any new debt.” ALEXANDER HAMILTON
“The maxim of buying nothing but what we have money in our pockets to pay for lays the broadest foundation for happiness.” “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” THOMAS JEFFERSON
These are not radical positions – nor are the others set forth in the Tea Party platform – that Congress should: (1) provide the constitutional basis for the bills it passes; (2) reduce intrusive government regulations; (3) balance the budget; (4) limit the increase of government spending to the rate of population growth; (5) and eliminate earmarks unless approved by 2/3rds of Congress. Are these positions dangerous or extreme? Certainly not. In fact, polling shows that Americans support these Tea Party goals by a margin of two-to-one.
Citizens are angry about the current direction of government. As John Zubly, a member of the Continental Congress in 1775, reminded the British: “My Lord, the Americans are no idiots, and they appear determined not to be slaves. Oppression will make wise men mad.” But does that anger automatically equate to violence? Of course not. It does equate to action, however; but instead of throwing tea overboard, modern Tea Parties are throwing out-of-touch politicians from both parties overboard.
The Tea Parties represent much of what is right in America – citizens reacquainting themselves with the Constitution and holding their elected officials accountable to its standards. Two centuries ago, Daniel Webster could have been talking to today’s Tea Party rallies when he said: “Hold on, my friends, to the Constitution and to the Republic for which it stands. Miracles do not cluster and what has happened once in 6,000 years may not happen again. Hold on to the Constitution!”
"Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed."
Martin Luther King, Jr.
or I guess they can head to the strip joint.
Go on keep electing Boxer, Feinstein, Waxman, Waters, Pelosi etc and the rest of the animals who have destroyed this state. Continue ignoring the illegal issue shoveling billions a year to them while they GIVE NOTHING BACK! Listen to Hollywood elites who want you to give, cut back whatever while they blow money and live the high life like there is no tomorrow!
Stop playing the game. Stop them all in their tracks expose them for what they are liars, cheats, self serving animals with a 'do as I say not as I do' attitude. Take back America though http://www.savingtherepublic.com
I'm afraid so,this country is on the verge of collapsing because over half the population now are on some kind of government assistance,the ratio can't be sustained,if and when it does collapse your going to see a lot of hungry people looking for something to eat and not finding it,when the government checks start bouncing you will know what time it is.
What would happen if we all just simply stopped paying taxes? They couldn't throw us all in jail. It certainly would send a message.
What bigger "voice" do we have other than our revenue stream and the taxes taken from it? Maybe then they would listen…… probably not.
Picture caption
"Is this all you peasants can give me, it is and will never be enough"
I wish we could emulate the UK's recent benefit cuts.
i was out last night supporting a tea party candidate.
can we give california to mexico already?
The government will classify all those businesses that don't forward the tax to the state criminal; enterprises,watch!
"California is not the only state that is in dire trouble financially"
That's true. It's just amazing that EVERY state that's suffering the worst economies just happen to be democrat strongholds. Why can't people in these states see this?
"That money could make a significant dent in the state’s $19-billion budget gap. "
Not that they shouldn't collect their taxes but less than 10% is not a dent it is a scratch
Because most of the people in those states are sheople. I happen to live in Central PA and we hardly ever feel the recessions because the economies here are so depressed it feels like we are in a constant recession. Most the tax money collected get funneled to the bigger cities so that they can try to keep their heads above water. It is about time the people living in the cities pay their far share of the tax burden for the social programs they enjoy.
You mean you think they don't own it already already?
Got property in AZ hoping one day it will be beach front
"EVERYTHING" of nothing is zero
With all the money they make off the METH-labs why not party on are dime
With luck one day it will be….LOL
"because they are poor are forced to take their food stamp money and gamble it away…………"
Of course this happens in every state. But then, it is absolutely obvious WHY this is happening. How obvious? Even before there was ever a welfare check in this country; at the time of our founding, our greatest leaders warned that doling out financial aid to the people would only serve to rob them of their humanity and self respect, turning independent people into serfs.
So as much as the liberals will claim to be "compassionate," the MOST COMPASSIONATE thing that we can do as a people is to force a vast majority of the people receiving welfare assistance to fend for themselves. Give them a three month notice that their benefits will be discontinued, and if they will not work; if they will not find a way to support themselves, they will suffer the consequences. I guarantee you, 90% of these recipients will find a way to survive, and they will become happier then they have ever been in their lives.
The only problem with that is it's like organizing the farmers
Everybody thinks about them selves first
But it is still a good idea
We haven't reached the level of the UK's benefits yet
Thank GOD
You are so right. Orcha stays in her out of state homes for the max time it takes to leagally evade her donation to the IRS. Very cleaver these progressive tax cheats. I haven't been to a movie theater in ten years. Don't want to feed the pigs anymore. http://omania.wetpaint.com/page/Oprah's http://www.taxresolution.com/blog/a-list-celebrit...
And this list goes on
California is a mess, but every mess has a remedy. Enforce our existing
"Federal Immigration Law" which decreases the Illegal population and cuts Crime, Terrorism, Drugs, & the drag on Health, Education & Welfare systems. Then cut the Fed Programs, then install Constitutionalists in local Govt.
New York is doing it by running Conservative Republican Joe Dioguardi for Senate! to BEAT Democrat Gillibrand, who was involved in the 'No Document' Mortgages! If Joe DIOGUARDI wins in New York, the bastion cesspool of socialist Democrats and Mosque lovers, we know we're making progress! Go Dioguardi!
well, next time they have one of those large forest fires, we call mexico, and say fire sale!!! and see if they bite?
'Never Gonna Stand for This' http://www.youtube.com/watch?v=PIPoPw9zgvQ&fe....
The Tea Party Movement will go down in history as saving America from a Socialist/Marxist Society which the far left radicals/ left progressives see as their promising future. Most Americans love America as our Fore Fathers envisioned it and will fight to protect it!!! Progressives can see their own demise happening in front of them in America today. It is a beautiful sight to behold. VIVA LA TEA PARTY. Run Sarah run, lets take the trash out. D.C. is full of it today.
http://remembernovember.com/
"Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed."
Martin Luther King, Jr.
"It is about time the people living in the cities pay their far share of the tax burden for the social programs they enjoy."
Until we're ready to cut people loose, telling them that the gravy train is over, they will NEVER be anything but a burden to you and everyone else who only pays into the system that these people abuse. Obviously they won't pay for the programs they use, so the only answer is to shut off the spigot and let them sink or swim on their own. I guarantee you the vast majority will find a way to survive without the "free" benefits.
I promise I could solve this in about 1 week –
I would use prison labor to start erecting a massive fence and tent city .. I'd call the media out to tell them what this is….
Oh, this ? Well we have a lot of business who have failed to pay the taxes that were due to the state.. We will be going by these places of business to either shut them down, collect the tax that is owed or the owners will end up here until we figure this out …..
The tax ofices phones would be ringing off the hook !!!! Next ??
"Many would turn to crime as the easiest way to get by."
And you think most of these people aren't already involved in criminal activity? We know for a fact that many sell their food stamps for added income. Many doctor shop for prescription drugs that they can sell. Or they deal in other drugs. They claim benefits for children that don't live with them. They continue to collect SS benefits for deceased relatives. They trade in stolen SS numbers to defraud the system.
Until we're able to cut these people loose to sink or swim, we will never know just how much fraud and abuse takes place, and the recipients will never find more legitimate ways to survive. I know this would be proclaimed as heartless by leftists, but there is just no other way we're going to be able to reform these entitlement programs into programs that ONLY help those who cannot help themselves.
So state workers are not doing their job to collect taxes, imagine that! And on top of this the sacbee reported about a car dealer in Roseville that was charging an extra couple hundred bucks and claiming it was a state tax that did not exist…I guess tough economic times require some crooked creative thinking on the part of business owners.I just wish the legislators would stop doing what this one car dealership owner did…making stupid unecessary/uncollected fees and taxes on top of the other fees and taxes they passed years ago, that might or might not be collected. Welcome to the insanity that is CA….
Their daughter was the stripper. EWWW! I even nauseate myself sometimes.
The LAT wants to criticize the people who didn't pass along the sales tax. Being the liberal news media, I'm sure the LAT doesn't villify the entitlement programs and bureaucracy in CA. It just wants to make a bad guy out of those business establishments. There always has to be a bad guy in order to justify raising taxes.
Keep taxing the people to death, CA. It's so much easier than being fiscally responsible.
"I agree, most of them will find a way to survive and be better off for it."
That makes me think about the old line, "illegals are doing the jobs Americans just won't do." But the fact is, you cut off the spigot of endless benefits, and we will find out that Americans WILL do those jobs, and most of them will be happy for the opportunity.
I would bet that most of those not sending in that Sales Tax are in economic trouble & need the cash to keep the door open.
I got nothing by way of an argument, in fact I have been thinking of hosting clinics on tar and feathering and use of pitch forks!!!
Um, guys, this "cesspool" is the 7th largest economy in the world. It's larger than Russia and Spain, right behind Italy. According to U.S. Department of Commerce estimates, California’s GDP (gross domestic product) was nearly $1.85 trillion in 2008. That's 13% of the US' GDP (during the recession, no less). So, yes, we have our problems and they are unique and messy, BUT we contribute much. There would be an enormous vaccum that would suck the rest of you down with us if California were ever to fail.
I disagree slightly, things get too big to handle and become unmanageable. Then become ripe for corruption. But reduced size limits the exposure to corruption, especially if you add in transparency.
But small size does not guarantee freedom of corruption, as you state. Morality, honor have lots to do with what the the product looks like.
ssso true
I think the businesses not paying are friends of Obama, the governator and other cronies in the legislature. And I'll bet the ones that are paying are the small businesses being run by honest people.
Crony capitalism at its best. Just follow the money.
CA is failing now. Businesses will flee because of the crushing taxes. E.g., Cisco is setting up shop in Russia because Russia offered no capital gains tax.
http://www.americanthinker.com/2010/07/no_ones_ca...
Russia's president spent several days in Silicon Valley recently looking for adventurous investors and came away with a $1B commitment from Cisco Systems.
I have sympathy for the Conservatives in CA. However, CA is cannibalizing itself. It won't stop taxing and won't stop throwing money at bureaucracy and entitlement programs. Instead, the LAT wants to demonize businesses that can't pay taxes; what it does is create a villian in businesses and justify raising taxes.
It's easier to raise taxes instead of being fiscally responsible. "Rest of you down with us if California were ever to fail" sounds like "too big to fail." AIG, GM et al. Throwing money at a problem does not solve it.
This doesn't surprise me. California is in such a mess from governing incompetence that everything is imaginable. What is really sad is that many businesses are holding on to their tax money while workers are getting government I.O.U.s in the mail. In light of their unique situation, it is truly unethical that these unions and businesses are not paying their taxes.
Of course it is the responsibility of the government to make sure the taxes are collected. In light of that, the same liberals who trumpet the "equality," "fairness," and "social justice" rhetoric are responsible for greater inequality, unfairness, and injustice.
Liberal environmental interventionists have influenced all businesses to move out of state, if they can. It will do no good to raise the Property Taxes as there are no Jobs left to help pay the mortgages. The homes are owned by the bankers who spent their bailout stimulus on real estate assets for the Bank. Let's just Build more Casinos,and Legalize the sale of Marijuana for the tax revenue, Obstruct the will of the people and allow Prop 8 to die at the Hands of the next Governor, Allow entitlements to include illegals. The Teachers Unions are now part of the public Pay role. There are 20 teachers at one grade school in my town making over $120,000/year times the number of grade schools in the state and you get the Idea. The Superintendent of Schools in San Diego County makes 50% more than the President of the United States. What did we really expect from the RINO Terminator Kennedy Clan? The Stimulus went to favored Union Contracts to Build Bigger City Halls. As is the case all across our Nation, The Private Sector and the Middle class are being regulated and taxed out of existence. California's' greatest resource is the agriculture and it is being held hostage for the water rights of a Delta Smelt. The Biggest Laugh, the guy responsible for a lot of the mess as a California Career politician Gerry Brown, wants to have another crack at giving our state away. His Campaign Ads claim that he has a plan to put California back to work…
Gerry Brown,You have been there all along why are you keeping your plan a secret?
Maybe next time California will vote for a midget Honduranean acrobat for governor.
In the interim, I suggest parachuting all the illegal aliens and welfare recipients into Saudi Arabia. They won't last a month.
I am a problem solver.
I hear you Gary, I live in California and I am sick and tired as hell. Both the Democrats and Republicans have screwed up California. That's why this year I will be voting for the AIP candidate for Governor, Chelene Nightingale. She is the only constitutional conservative running for Governor. Listen to her in this vido
http://www.youtube.com/watch?v=qCcJkKWyhgc&fe...
and in this radio show
http://www.californiality.com/2010/09/kfis-john-k...
We all need to get behind the tea party candidate Chelene Nightingale http://www.nightingaleforgovernor.com
It gets even worse… Jerry Brown is Mr. Uber Alles from the left. How about the Republican? Meg Whitman… well, she is no better. As a matter of fact, she is a liberal who is a huge fan of Van Jones, check out this video http://www.youtube.com/watch?v=iSn37TMXZO8
1. What is she doing in a "CLIMATE CHANGE" cruise in the middle of the Arctic with Van Jones???
2. She is a huge fan of avowed communist Van Jones? Huh!?!? Her own words not mine.
I am voting for Chelene Nightingale for Governor http://www.nightingaleforgovernor.com
I am going to vote for the tea party candidate Chelene Nightingale.
Spread the word. We need to get behind this candidate and send shocker much bigger than O'Donnell or Miller.
Send your contributions to http://www.nightingaleforgovernor.com in order to help her get elected.
We need to turn off the spigot but we also need to get the govt out of the way so that the markets control the prices of the products being produce through supply and demand. To many govt policies are artificially inflating the prices we pay for the products we buy.
You are right, it's why our system was designed to keep government close to the people … Local. Having been there trying to manage large unwieldy organizations, it's hell.
Common sense things like drilling rigs are boats, don't fill them with water or they will sink get totally forgotten in the workings of useless bureaucracies.
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