IOUs a Taxing Issue

Friday, January 9, 2009

Page 11

AT THE SIDEBAR (Column)

IOUs a Taxing Issue

By J’AMY PACHECO

Let me get this straight…

The good people at the helm of the state of California have been unable to come up with a budget, and the state is about to run out of money. If that happens, I and my neighbors can expect to receive, in lieu of an income tax refund, an IOU from the Golden State.

Seriously?

At my house, we have a budget, too. We know how much my husband and I bring in each month, and how much we have to pay out. Sometimes, when things look rosy, we splurge and take a weekend trip somewhere. But if we see the bottom of the coffers, we opt to stay home with a rented movie instead.

If we run low on money, we don’t go knocking on the neighbors’ doors for a handout. If we have a tight month, we suck it up and make it work.

Which is why I don’t get how our glorious, tax-happy state could possibly find itself in this position.

We the People pay taxes. We pay taxes on the money we earn, and are taxed again on just about every dime we spend those taxed dollars on. We dole out tax money to governmental entities at every level, from the feds down the cities in which we live. We pay taxes for using the telephone, pumping gas, eating out, staying in hotels, and so much more.

Once, I bought a car and paid a hefty amount of sales tax. Months later, I got a bill for even more vehicle sales tax. It turned out the county I lived in at the time had a higher sales tax rate than the one in which the car was purchased, and somebody thought I should pay for that. So I did.

It’s not that I mind being taxed. I know that I’m paying for the roads I drive on, the police officers who make sure I don’t speed, firefighters who would no doubt put out any flames that attempted to consume my home.

What I do resent is paying taxes for the services of those who have put our state in the position of being unable to meet its financial obligations. As I watch money being sucked out of places like our schools and courts; as I see people struggling to retain their jobs and homes, I can’t help wondering how our legislators can even ponder trying to get more money out of their constituents, let alone delay paying back that which they owe.

To issue IOUs for money owed by an entity that can’t pay its bills seems ironic. The way I see it, the only way for the state to get the money to pay back everybody who gets an IOU is to increase taxes. That means they’re going to take money out of my paycheck to pay back the money I already paid that is owed to me.

I suggest we skip the whole middleman thing, and I just keep my tax dollars for a while. That would save the cost of ink and paper to print the IOU, the postage to send it to me, as well as the eventual check that is supposed to replace the IOU.

I confess that I don’t feel much sympathy over the Franchise Tax Board running out of money. If they send me an IOU and don’t pony up in a reasonable amount of time (by MY definition), can I threaten to file a lien? Can I attach “their” income? Can I charge the agency interest, penalties, and late fee charges?

Along those lines, can I audit them to see why they can’t pay the money they owe? When dealing with them, can I be as polite and helpful as the agency is known to be?

What I’d really like to know is what state officials are giving up while they ponder raising taxes and sending out IOUs. I’d also like to know why any legislator should get anything, financially, until these issues are resolved.

For me, the last straw was the proposed tax on entertainment, which was to include theme park tickets.

I’ve made no secret of the fact that I have an annual pass to a theme park. I don’t take extravagant vacations; I don’t live a lavish lifestyle. Every year, when our pass renewals come in the mail, I struggle internally over whether or not to spring for the passes, which are not cheap.

But the theme park is my personal happy place, and I’m willing to give up some things in order to be able to buy and use them.

When I learned those in charge of such things wanted to tack a hefty tax onto the price of my pass, I couldn’t believe it. I was mad enough to want to throw some tea into a harbor. Unfortunately, I live in a landlocked desert.

So all I, a tax-weary citizen, can do is turn my eyes north, and ask, “Seriously?”