The following is an excerpt from OpinionJournal.com’s “Best of the Web” written by the editor, James Taranto.
A Loan in the Dark
The Los Angeles Times reports on California’s latest effort to mismanage the state’s finances:
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.
Technically, it’s not a tax increase, even though it may feel like one when your next paycheck arrives. As part of a bundle of budget patches adopted in the summer, the state is taking more money now in withholding, even though workers’ annual tax bills won’t change.
Think of it as a forced, interest-free loan: You’ll be repaid any extra withholding in April. Those who would receive a refund anyway will receive a larger one, and those who owe taxes will owe less.
Tax refunds are evil, because they fool people into thinking they’re “getting” something from the government, when in fact all they’re receiving is their own money, months late. If the private sector tried this–say, your insurance or power company “borrowed” money by tacking $20 on to your monthly bill and refunded it, without interest, the following year–it would be a pretty clear case of fraud.
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