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California says pay up

April 20, 2011

By LISA RIZZO

California is trying to shame 250 businesses and people into paying their delinquent taxes, including two individuals from the Central Coast who combined owe more than $1.1 million.

As part of its collection tactic, the state posted its annual list last week of delinquent taxpayers.

Every debtor on this year’s list owes more than $300,000 in personal or corporate income tax. Dozens owe more than $1 million in outstanding taxes and the list topper exceeds $14 million.

Among the 250 people and businesses that owe the most in back taxes, the State of California Franchise Tax Board has filed tax liens against Nancy Perea of Santa Maria for $781,063 and Kenny Seguine of Nipomo for $360,525. The liens were filed in 2007 and 2009, and as of last Thursday, the state had yet to collect.

The local tax delinquents are contributors to California’s estimated $6.5 billion tax gap which is the difference between taxes owed and taxes actually paid. It’s a gap the state says it is working hard to close.

Since the latest directory was posted last week, dozens have settled their debt to the state in order to get their name removed from the proverbial naughty list. But it has only made a small dent in the tax burden which as of April 14 amounted to $193,411,700.

Fearing the public outing, several debtors came forward after the tax board mailed out a warning letter earlier this year netting the state more than $13 million. The tax board has collected more than $78 million since the list was first published in 2007.

The board says that when people “do not pay their fair share, it places an unfair burden on those who do. Closing the tax gap is in the best interest of all Californians.”

Nearly 90 percent of taxpayers typically pay the taxes they owe, but more and more people are filing without contributing their part.

In 2008, the most recent year for which information is available, 611,318 taxpayers reported incomes of $200,000 or more.

However, 2,431 of these households paid no California personal income tax, according to the board’s 2009 annual report. It’s a figure that has more than quadrupled in just over a decade, rising from a mere 579 households in 1997.

A further sting to the massive revenue shortfall is the fact that California is also losing out on more than $1 billion each year in unpaid sales taxes on goods purchased from outside the state where some online retailers refuse to collect the taxes required, according to the Board of Equalization.

The California Budget Project says that most people are not aware they owe California sales tax for these online purchases. Regardless they are still legally obligated to pay.

In 2010, only 61,000 out of 16.9 million households paid the required tax when they filed California personal income returns, according to the Board of Equalization’s February 2011 Economic Perspective. The board projects unpaid retail taxes will cost the state more than $1.1 billion in 2010-2011.


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I think it is really funny that this state re-elected to Gov a guy who did nothing for the state the first time around.Then expect him to fix the Tax shortfall…What a bunch of fricking morons…I believe that if the State government got out of the way and reduced the all of the real STUPID Programs ,regulations,fees and taxes they charge Business and residents of this State we would go back to being the economic powerhouse we used to be


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Be careful of the “flat tax.” It may not be all it’s cracked up to be. Murray Rothbard didn’t think so. Read a brief excerpt of what he says about it:


“To return now to the flat tax: the seductive rhetoric invoking the “special

interests” has lead most people to believe that everyone will benefit from the

flat tax except a few wicked corporations or multi-millionaires. Nothing

could be further from the truth. If the flat tax is enacted, millions of us will

find out, too late and to our chagrin, that, to paraphrase Pogo: “We have met

the special interests and they are us.” Or as Senator Robert Dole (R-KS) put

it recently on the issue of the flat tax as an allegedly fair tax: “Everybody

believes in fairness unless they’re involved.”


More @: http://mises.org/rothbard/flattax.pdf


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why should we penalize hard working business owners who hire people and keep the economy going with higher taxes? and give the easy going employees that get to relax after 5pm a handout? while we slave to keep our business alive. why should we pay more? how about the harder you work the more you make instead of the harder you work the more you pay? lets have a flat rate tax everybody pays no matter what. say 15% across the board or whatever …makes sense to me that way its fair and we are not steeling from the rich and giving to the poor.


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Original the taxation parts of the US Constitution had it set up that way …..why did the Govt change it. Each state based on the census would be given a bill to pay to the US treasury which they would then divide equally among its citizens…based on ability to pay /income level…now the tax rate is all variable and everything is screwed up. Deficit spending should be OUTLAWED except in times of National /State emergancy.


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Okay, but who is gonna shame the California Franchise Tax Board into collecting the $2.8 MILLION in salary advancement several of their employees received but never paid back? What a hypocrisy!! Sickening…


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I’m more of the thought that we shouldn’t lower taxes, but we shouldn’t raise them either. I think applying them fairly would be more appropriate. Since 45% of all Americans don’t pay a dime of federal income tax, doesn’t it seem like a sham for the 55% of us who do. Why don’t we raise taxes for the 45% who don’t pay and lower the taxes for the 55% who do and meet somewhere in the middle.


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I will pay more when those who pay nothing still get a refund of MY money because of the UNEARNED INCOME CREDIT. Several people in my family (we all have them) are damn proud that they pay little or no tax and get this refund. What a scam….


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I do several relatives and family friends taxes. I had three this year that were given free money. The most was a single mom (window) who paid about $2K in taxes/med/ss/etc. and got back almost $5K – a nice $3,000 profit!


While the single, retired military guy living on SS and his measly pension had to pay an extra $30 to the state, and $1 to the Fed. This all on about $2K paid in taxes – similar to the single mom. But he had NOTHING to give “credits” (like dependents, mortgage-interest/rent, etc.).


A flat-tax would be a cold shower to the “lower 50%” that is for sure, but an ideal would be monthly tax bills, and 1099 EVERYONE. Make benefits illegal, we all get paid a set amount (that amount can include enough for benefits, etc) and then each earner gets their tax-bill (15%? 17%? whatever) the next month or so, and each month thereafter.


No more filing once a year, no more withholdings, no credits, vouchers, write-offs, etc.


Obviously this will never fly, as the current tax code is simply a political tool now-a-days, especially to buy votes and favors. Don’t expect any lifetime sponge (read: politician) to change it ever.


Let family, friends, religious groups, whatever help those who need it. The more something is local, the more control one has over it. We’ve become too used to “the government needs to do something about X or Y”


I remember hearing some of the flood victims back east saying, “Who’s going to help us? We need help!” (that was the news sound bite). So soon after the major disaster in Japan, where one was hard pressed to find anyone sitting there saying “we need help!” – they just began helping one another. A lesson to be learned, no doubt.


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The US is out an all time low of 16% taxes of GDP. Hmm perhaps Dubya and Ronnie’s tax cuts hurt US?


Economists agree: Tax cuts don’t create revenue


Self-paying tax cuts are a popular delusion, except among economists.


University of Michigan economist Joel Slemrod is adamant on one of the key economic issues of our day: ‘Tax cuts don’t pay for themselves! Period!’


Hardly any economist would disagree. This is true for Republicans as well as Democrats. It is also true regardless of whether they describe themselves as NeoClassical, New Classical, Rational Expectations, Monetarist, Keynesian, Austrian or New Institutional economists.


Yet, for a substantial portion of the general public, the idea that cutting tax rates will increase tax revenues has become an article of faith. The following anonymous comment to an online Associated Press story is typical: “The only way our government can create jobs is to cut taxes. It’s been proven over and over again. Cutting taxes also increases government revenue.”


The phenomenon of economists sharing a broad consensus on some issue that is at odds with the beliefs of many in the general public is not rare.


http://www.edlotterman.com/RWE/Articles/20100314.htm


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The only way to stop the drunken, profligate spending behavior of the State is for more tax slaves to stop paying “their fair share”, not less.


Understand you are talking about the decades long wild spending habits of largely unelected Government bureaucrats who insisted that everything was free because someone else was going to pay. Retire at 50 at full or more salary with yearly COLA bumps and unlimited lifetime medical, double dipping till you puke and bring your kids in right out of high school to ensure generations of guaranteed family wealth from the public sector empire funded by sucker private sector tax paying “civilians”.


These same trough feeders will soon understand that tax payers are completely skint, cannot be bled for another quid, the parasites have succeeded in killing the host and they will therefore be insisting that the Government defaults on its crippling bond repayments so that they can throw off the debt and go back to doing nothing at work before spending half their life retired.


And I hope they do. The Bondholders and the banks could do with a serious lesson in economics. Do not lend money to Socialists. They will spend it on buying votes to keep themselves in power. In return, they will sell the very people they insist they represent into slavery to the highest bidder, confident , just like the banks, that if things get really ugly, some idiot taxpayer will be forced to pick up the bill.


Well, I will not be accepting this debt. I didn’t make the contracts, I didn’t vote for the politicians and I won’t be paying. All you have to do is default on your payments on a debt that isn’t yours. Stop paying taxes. Stop consuming. Withdraw your labor. Your taxes are funneled directly to these bureaucrats and companies in a never ending spiral that already owns the labor of your children, like a six year old forced to work a in carpet factory because the landlord built an extension to his mansion.


We are woefully in debt, money has no real value, we produce nothing, are owned by banks and the vested interests of those who fund our political parties, our laws are made by unelected self-serving zombie blood suckers and we employ millions at the cost of those on minimum wage just to support “the consumer price index” and put enough money in the system that nail salons opened by people with a grant to get them off the dole can paint the nails of those ON the dole.


Politicians have placed us in slavery to the very people who caused the mess. Remember, the difference between a Welfare State and a Totalitarian State is merely a matter of time. Enough is enough.


PS, you might have to actually, like, work and create and add value and make stuff, but if you ask your grandparents, I’m sure they’ll give you a few tips.


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Very well said!


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Yes, When spending is down this year by $25 billion from 2007 levels, lets make it worse. Typical con.


PERHAPS, if we decided to go after the rich, not just in Cali but nationally? No, instead the cons will blame the poor, brown, gay, or unions for the problems, lol


Funny how Germany is 40% unionized and get a min of 6 weeks vacation AND universal health care along with some of the highest wages, they are a larger exporter than the US? How can a nation that is only 75 million people outperform US? By not buying into the race to the bottom being sold to you be the right wing “think tanks” and lying right wing media and corporatist!


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That is excellent. Where did you learn to think like that? Are you a libertarian? Have you read “Economics in One Lesson,” by Henry Hazlitt? A little Murray Rothbard? Or maybe Ayn Rand? Whatever the case, you are right on target. This is exactly what Californians need to hear. But will they take the medicine? Don’t count on that one. Rather, I see city lights flickering out, one by one, along with the civilization and “public services” which accompanied them, a la Atlas Shrugged.


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Economics in One Lesson by Hazlitt should be required reading in all of California’s schools.


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danika, I don’t put much faith in the rating system…S&P, Fitch & Moody’s are all part of the big bank & Wall Street failure disaster. It’s common knowledge that they all gave phoney ratings to some really really bad stocks.


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RU, exactly. Those formerly respected companies were found to be rating others for pay, to our detriment! More crooked suits ripping us off.


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Quite right. The ratings companies are “in on it,” so to speak. It’s all phony, a con from start to finish.


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Our country’s credit rating just dropped to negative on the S&P scale; our beautiful State of California is walking a fine line to bankruptcy; our county and cities are close behind. Who shames them?


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Also, very well said!


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NOT TRUE:


The United States is at risk of having its pristine credit rating lowered if politicians in Washington cannot agree on a plan to bring down the nation’s deficits over the long term, ratings agency Standard & Poor’s said Monday.


The change means that there is a one-in-three chance that S&P could downgrade the nation’s “AAA” credit rating within two years.


http://money.cnn.com/2011/04/18/news/economy/us_credit_rating_outlook_lowered/index.htm


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