California to issue I.O.U.s instead of tax refund checks???

The Near Bankrupt State Wants to Give You an IOU. Try Paying Your Mortgage or Tuition with It. The 2009 income tax season is slowly revving up, and soon California taxpayers are going to file their returns with the Franchise Tax Board. Some hope to receive a tax refund checkto use for a bigger purchase, to pay off some credit cards, or to at least make some headway and get back on track with the overload of monthly bills.

However, if Arnold Schwarzenegger and his band of merry men cannot work out the budget, there is a good chance that the State of California will be paying income tax refunds with IOU slips instead of checks.

California democrats presented the governor with an unworkable budget package containing a number of illegal tax hikes -- referred to as "fees" and "surcharges" - that sought to get around voter determined (Proposition 13) two thirds majority vote requirements for any tax increases.

At issue was, among other things, a Democrat proposed gas tax hike of $0.13 per gallon! Squaring this with a Time magazine reported an estimated jump of California's unemployment rate to 8.5% by the end of 2009, the public outcry was loud and fierce. Lawsuits by taxpayer advocates and a flurry of emails and calls to the gubernatorial office caused Governor Schwarzenegger to veto the budget, leaving California in its continued fiscal mess.

The Los Angeles Times reports that the latest brainstorm out of Sacramento is to begin issuing IOU slips instead of California income tax refunds beginning February 1st. Moreover, if you are student relying on a CAL grant for your tuition payment, it is time to hope and pray that the admissions office will accept your vowels instead of a check for your student fees. Student grants are also not going to be funded come February.

California is running out of money, and will officially be in the red come the end of January. Republicans are digging in their heels and have proclaimed that they will not accept any budget with tax increases. Democrats have been just as adamant that they refuse to even consider a budget if it contains any spending cuts and no significant tax hikes.

 

It isn't just California that is going broke. All 50 states are in big trouble. On top of that more than 45 major cities are broke as well. They will all end up having to cut their expenses and that means more layoffs of employees adding to the ballooning unemployment problem. We will soon see double digit unemployment. What we are looking at is almost unimaginable.

 

Some states make their criminals pay for their incarceration. That may seem like the ideal solution on the surface of it but most criminals are dead broke when they go into prison and have to get help from their families while in prison. Of course, the costs are delayed until they get out and go to work. Sounds like a great lan but how is that going to work out in the face of double digit unemployment? Like so many other grand schemes of government, it won't.

 

If government didn't promise to support or otherwise take care of everyone then the politicians would have no platform upon which to get elected. We aren't likely to see responsible government in our lifetimes if ever.

Before personal responsibility can become the norm people must become empowered to make it happen. That empowerment can only come when people have the means with which to accomplish it. That means everyone must have an income sufficient to meet their essential needs and at least some of their desires. It means that instead of inventing new social programs or expanding old ones government must work on developing a positive business environment.

More jobs at better pay, not social programs that only drain the economy.