California Stealin’: Taxation and Theft

California is a fiscal basket case.  There’s no real argument about that.  Now they’re trying to find more underhanded ways to wring more tax dollars out of the citizenry.  According to The Los Angeles Times:

Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners — holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear.

Tax withholding is a scam.  Despite any facile claims of needing a steady stream of income, tax withholding is designed to allow people to ignore the level of taxation and to make people pay more taxes than they rightfully owe.

First off, if the government can spread your tax burden over a long period of time, you’ll notice it less.  Further, by taking the money directly from your employer, you never actually see it.  The government has removed you from the transaction, and you don’t feel the complete tax burden that has been imposed upon you.  However, if they are only taking from you what you owe, there’s nothing too devious about that.

The insidious aspect of tax withholding is that it leads to people paying excessive taxes – taxes beyond what they are legally obligated to pay.

Come April, when we all file our taxes (assuming we do), we all, presumably, are hoping for a refund.  If, after taking an initial stab at completing the ridiculously complex tax forms, we owe money, most of us will look for more deductions or rebates.  If, after taking another pass at the tax forms, we now are owed a refund, most of us are happy.  If, after the initial attempt at our taxes, we are owed a refund, we’re happy.  Basically, we are, in effect, not worried about the amount of taxes we pay; we are worried about getting a refund.

Once we have that refund, we are far less likely to continue to look for more deductions.  We’re satisfied – we have our refund – so why bother?

And, thus, we come around to increased withholdings.  Implementing regulations that command excessive withholdings increases the number of people who will get refunds.  Consequently, it increases the number of people who won’t look for all the deductions they are owed.

But, the government has willfully deceived these people.  They may get bigger refunds, but their tax payment will have gone up even though their tax obligation did not.  It may not be theft, but it’s not that far off.

And, come on, that notion that the government needs the cash and can’t wait until April to get it is an utter lie.  They can just issue I.O.U.s.

(H/T: Veronique de Rugy.)

Jon Corzine Fails to Buy New Jersey Election

Alright, it’s just about time to permanently retire the trope that lots of campaign spending buys elections, and, thus, scrap all ill-conceived and undemocratic campaign finance laws.  In politics, money isn’t everything; just ask soon to be former New Jersey Governor Jon Corzine:

Corzine, a former Wall Street executive, has spent $23.6 million on the general election, compared to Republican Chris Christie’s $8.8 million and independent Chris Daggett’s $1.2 million, according to the state Election Law Enforcement Commission.

Corzine donated or loaned his general election campaign $22.6 million of its $24.1 million, writing checks to cover TV ads, several pollsters and a $15,000 hall rental for President Obama’s visit to Fairleigh Dickinson University.

If political campaigns were all about accounting, Mitt Romney would have been battling Obama last year, Brian Mulroney would have become Prime Minister a decade earlier than he did, California and Maine would have gay marriage, the Charlottetown Accord would have passed, and it might have been Forbes v. Bradley instead of Bush v. Gore in 2000.

Sure, one can spend more money and win more votes; the Obama-McCain election demonstrates that.  But could it be that the reason that Obama was able to raise far more funds than McCain is the reason he won more votes: he was insanely popular?

In The Ottawa Citizen years ago, John Robson wrote on this very topic.  He argued that no matter how much money you spent, you couldn’t convince people to eat a sludge sandwich (sorry, no link).  Voters in New Jersey know sludge when they see it, and, thus, voted against Jon Corzine.

No matter how much he spent.