Why Can States Delay Your Refunds?
Feb 16, 2009 Political
First it was the state of California and now it is Kansas. These states are issuing IOUs for taxpayer refunds because they are out of money. A refund means that the taxpayer paid too much in and if that is the case why does the state not have the money? It is quite simple to answer. The states spend the money when it comes in and they have little regard for the budgetary process.
It is interesting to note that states with problems are run by Democrats either as the governor or as a majority in the legislature or both as in the state of Maryland whose fiscal mismanagement has led the politicians to depend on pork from the stimulus bill to avoid laying off employees.
Yes, the governor of California is a registered Republican and that is as far as he goes. He is a RINO and the state is run by Democrats who turn a blind eye to illegal immigration and tax residents and businesses so heavily that they pack up and leave. California is on the verge of financial collapse and it is mostly due to unsound fiscal policy and burdensome taxation.
I want to know what gives the state the right to delay paying you YOUR money? If you owe taxes they want them right away. Delay in paying your fair share will result in penalties and interest. Will these states pay penalties and interest to the people who are owed money?
Interestingly, a report from July 2008 discussed states with looming financial problems and several were noted as being financially strong:
States where the housing market is in a slump also are facing severe financial challenges, including California, Delaware, Florida and Massachusetts. To address the issue, many states have reduced their current-year revenue forecasts, in some cases several times.
However, says National Conference of State Legislatures Executive Director William “Bill” Pound, energy producing states appear to have a strong fiscal situation and a good outlook for fiscal year 2009.
This, Pound says, is the case for states like Idaho, Wyoming, North Dakota, Louisiana and Texas — though those states have no personal income tax or corporate income tax. San Antonio Business Journal
Several things come into play. The states doing well are energy producers. In addition, they have no personal or corporate income tax. States without energy production facilities would still benefit if they reduced personal and corporate taxes. Texas has done well for quite some time and a recent report indicates that even though the state feels the economic distress it is doing well because of sound fiscal policy.
States like Kansas and California would do well to pay attention. Imagine how well California could be doing if it allowed offshore drilling for the abundance of oil under its property. It would also do the state well to reduce taxes on its citizens and the businesses that remain there. Tax cuts always increase revenue. If the revenue is not spent recklessly then the result is good. Unfortunately, most politicians have not grasped that concept.
The federal government would have done well to follow the model of Texas and the others. Instead of canceling the oil exploration and drilling leases the feds should have gone ahead with it. That industry would produce plenty of jobs and it would help the economy. The stimulus should have included a reduction in the corporate tax rate. I think it should have been suspended for a year and then brought back to half of what it is now.
This would have stimulated the economy. However, the goal of the bill was not so much to stimulate the economy as it was to put special projects into place and to pay off political supporters. Very little in the bill will stimulate and certainly not nearly as much as cutting taxes and increasing domestic energy exploration and production.
Just ask Texas.
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Tags: california, fiscal, kansas, liberals, refunds, states, taxes, texas