A "Concerned Citizen" wants to know more details on how Prop. 30's retroactive change to income tax affects him. Will he be penalized for inaccurate withholdings?
I've received email from a few people concerned about what Prop. 30 means for them. Here's one that I'll share following Wednesday's post on "Prop. 30 has passed, but how do you pay retroactive taxes?"
What about individuals like myself who are high-income W2 wage earners and have their state income taxes withheld via each paycheck? I don’t pay quarterlys! I will have underreported with a possible penalty! Mr. Chamberlain didn’t address that! But my guess is that he will be so gracious and not charge a penalty. What if I don’t have that extra cash sitting around?
Jay Chamberlain got in touch with the Franchise Tax Board on this one, to make sure we had the right answer. Indeed, the same waiver without penalty applies to the withholding issue as it does for an estimated payment, Chamberlain said. When there's a law change that affects taxes within the same year, the state can waive the additional money that would go into that estimated payment without a penalty — along with the money that would go toward withholdings, Chamberlain said.
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A parking lot is seen empty at an out-of-business store January 27, 2009 in Vallejo, California. Fact check No. 1: Higher taxes aren't necessarily a business killer -- divorce may be a bigger factor.
With less than a week to the Nov. 6 election, there's a lot of information - and misinformation - out there about Prop. 30. The measure, supported by Gov. Jerry Brown, would raise sales and income taxes in order to avert $6 billion in primarily education cuts.
Prop. 30 is written into the enacted 2012-13 California budget, which presumes that the measure will be approved by a majority of voters Tuesday. Over the next several posts, we'll try to break down the proposition and examine the big questions that have been raised in political ads over the last weeks.
What Prop. 30 does: Increases personal income tax for seven years on people making more than $250,000. It would be implemented retroactively, starting Jan. 1, 2012. People making between $250,000 and $300,000 would pay 1% more (up to $3,000). People making between $300,000 and $500,000 would pay 2% more and people making more than $500,000 would pay 3% more in taxes.
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A pedestrian walks by an H & R Block office on April 15, 2011 in San Francisco.
With Los Angeles voters facing a parcel tax to raise money for schools, and the governor's initiative to raise sales tax and taxes on higher-income earners this November to avoid cutting $5.2 billion in education funding, some people have wondered what exactly happens to their regular annual taxes.
You know, the ones due today.
People have asked me what the state does with their money. Especially since California has the highest statewide sales tax rate and one of the highest income tax rates in the country. How is it possible that the state is 47th in the nation on per-pupil spending when so much of that money is supposed to go to education?
I spoke with H.D. Palmer, the deputy director for the California Department of Finance today who tried to explain how we got here.
"What happened was the recession," Palmer said. "That's the short-form version of it."
John Deasy, head of the Los Angeles Unified School District
Superintendent John Deasy will unveil the proposed LAUSD budget at today's board meeting with a shortfall greater than expected at $570 million. There are proposed cuts to early education programs, the academic decathlon, science centers, band, and adult education, according to a board staff member who was informed of the proposals Monday.
"It's ugly. Absolutely awful unless we get some help," the board staff member said. "Everything that is good about education that keeps people in schools is going."
The board staff member stressed that the details of the budget may have changed since they were informed, as it is a work in progress.
The budget proposal will be voted on at next week's board meeting. Between now and then it is expected to change a number of times as the board members debate what is or is not a necessary cut.
L.A. Unified Superintendent John Deasy painted a stark budget picture at today's first board meeting of the year — a $543 million budget shortfall for the next academic year, plus the possibility that thousands of employees could face layoffs, whole school programs could be cut, and months of school could be lost.
"Quite simply we've reached the point where there is not a single solitary thing in this budget that can and should be reduced," Deasy said. "I actually believe, at this point, that the rights of youth are completely imperiled, if not outright violated, by the continued cuts in public education in the state of California."
At Tuesday's board meeting, Deasy's presentation went from dark to depressing, as he outlined the possible scenarios the nation's second-largest district faces, depending on whether an initiative to raise taxes that the governor is trying to put on the November ballot is approved by voters.