CA: Tax chumps

LA Times ^ | 10/21/05 | Editorial

[NormsRevenge]

GOV. ARNOLD SCHWARZENEGGER'S vetoes of several bills that would have strengthened the enforcement of business tax laws were cheered by the usual suspects. Business and anti-tax groups have reason to rejoice, but their happiness comes at a cost to the rest of the state.

The Legislature's tax-collection measures were passed this session on the heels of a resoundingly successful program that collected billions of dollars in unpaid corporate taxes by offering an amnesty, in combination with bigger penalties for those who don't pay up. Schwarzenegger had credited that program for allowing him to restore $1.3 billion in sorely needed transportation funding to the state budget this year, along with some education funding.

Among the vetoed measures was a 50% penalty on businesses that fail to turn over state sales taxes collected from customers. He apparently bought the reasoning of the Chamber of Commerce, which said in a statement, "There could be many benign reasons why a retailer inadvertently fails to remit sales taxes." There could also be benign reasons, such as an overdue college tuition bill or an unforeseen medical expense, that others among us would need extra time to pay a state income tax bill.

--snip--

The most interesting veto concerned a bill that would have required Californians to pay state taxes owed under any judgment entered against them by the Internal Revenue Service. A recent court decision said the state couldn't collect taxes in some long-running cases, citing a four-year statute of limitations on tax violations. The state Franchise Tax Board was shocked by that decision, ...

--snip--

Schwarzenegger's sympathy for businesses that "forget" their tax payments or game the tax code at the expense of the state budget is ludicrous. But the worst aspect of his vetoes is that they make honest taxpayers feel like chumps.

[Doohickey]

In a few years there won't be any businesses left in California.