Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
Logic?

It's taxes. Taxes and logic don't mix.


However, I would point out that California's fiscal year ends on June 30. And I'll also point out that the 2nd quarter sales tax prepayment scheme gets more of the taxes paid in by June 30.

Some might also point out that estimated income tax payments are also heavily biased towards payments before June 30.

Our esteemed and honorable state legislators have, on two different occasions, changed the laws to require more tax payments just before the end of the fiscal year. This has the effect of accelerating payments into an earlier fiscal year, increasing revenues for that year.

Now I don't know if it's coincidence or not, but it just so happens that these changes took place in years where balancing the state budget was exceedingly difficult. The republicrats didn't want to change spending and the demolicans didn't want to change taxes. So they compromised by doing neither and just accelerating payment of taxes that were already on the books.

Of course, like any kiting scheme, to keep the kite flying you have to keep accelerating the payments. It's just a one time bump to state revenues.

That's why after the first change (which happened to be the sales tax change) they had to go back to the well a second time for the income tax change. Nothing had changed since the first change: taxes didn't change, spending didn't change, positions didn't change. So the only change they could make that wasn't a change was to change the timing of payments.

--Peter
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.