I don’t often agree with Bill Lockyer, California’s Attorney General, but I absolutely agree with his view of RALs (Refund Anticipation Loans). These are available from tax preparers and allow you to get your refund “instantly.” There’s only one problem with the loans: interest rates that can reach 700%. They’re a good deal for everyone but the recipient.
Lockyer is quoted in this article in the Sacramento Business Journal.
Below, I comment on California’s bankrupt budgeting process. According to this report from the Heritage Foundation, the Federal budgeting process is only slightly better. Among the points made in the report is that the budgeting process has a bias towards increased spending and increased taxes.
I didn’t need a report to tell me that.
That’s the Democrats’ view, in this article in the Los Angeles Times. The article says that because of Proposition 13 limits on property taxes (properties are not reassessed until a change in ownership), California loses tax revenues.
It’s true.
It’s also true, but not stated in the Times, what the impact would be if this proposal were to pass. Fewer investments in California. Fewer jobs. Higher prices. As noted, California is already one of the most expensive places to do business in the US. But it’s not enough for the left.
If you run a business, you need to turn a profit in order to stay in business. If you have a non-profit, your revenues and expenses need to balance. But if you’re the Federal Government, you can have a deficit: you just print more money. Not the State of California, though; under California’s constitution, budget deficit’s aren’t allowed (laugh).
Of course, if you live here you know of our budget deficits, and the borrowing that has allowed “balanced” budgets. Now the Legislative Analyst has issued a report, Revenue Volatility in California, that California’s tax system is a mess.
Any bets on the Democratic legislature paying attention to the report?
After reading Hugh Hewitt’s Blog, starting a blog for Clayton Financial and Tax became a necessity, not a project for “tomorrow” (whenever that is). There are already some excellent blogs covering taxes (see the blogroll on the right–if yours isn’t included, email me a link and I’ll add it on), but only the Leonard Letter looks at taxes from a California perspective. My goal is to focus on taxes and how they impact what we, as citizens and taxpayers, get to keep in our pockets.
Inevitably, this means that I have to look at the politics behind taxes. An example is a proposal currently in front of the city council of Los Angeles which would increase the sales tax from 8.25% to 8.75% (the proposal failed to make it on the ballot by one vote). If this proposal were to pass, then business would increase in nearby cities (e.g. Burbank) because prices would be less expensive than in North Hollywood (part of the City of Los Angeles). That’s a positive for Burbank, but a negative for Los Angeles. Additionally, if prices increase in Los Angeles (they would), then sales will decrease.
I’ll also be looking at humorous tax events. Tax cheats, tax evaders, and humorous taxes are all fair game. And if I get wind of a politician saying things like Linda Stubbs of Middleton, Ohio, you will hear about it.
Russell Fox is the principal of Clayton Financial and Tax. Russ has been in financial management and tax for over 22 years, and has previously served as a CFO for a dot-com. Russ received his MBA from the University of Southern California and his BS from the University of California, Berkeley. Russ is an Enrolled Agent and a member of the National Association of Enrolled Agents, the California Society of Enrolled Agents and its’ Orange County Chapter.
Russ formed Clayton Financial and Tax in 1999, and has been serving the Orange County area since then. His tax practice has two specialty areas: small corporations (typically Subchapter S corporations) and gambling. He is accepting new clients and can be reached, by email, at rcfox at claytonservices dot com.
