Monday, February 15, 2010

California Lawmakers are Desparate - Some Reviving Idea that State would Borrow Money from Independent Contractors

Despairing of source for money to close California state budget gap, some lawmakers in Sacramento have revived the idea that the state would borrow money from independent contractors during the year and force increased withholding of state income tax.
 
This bad proposal would require private companies and government agencies to withhold 3 percent of payments they make to independent contractors and pay the money to the state instead.

About three million people, small business owners who are independent contractors in California, would be effected, including physicians, some hospital workers, lawyers, REALTORS, real estate agents, preachers, physical therapists, taxi drivers, psychologists, farmers, marriage and family counselors, miners, personal trainers, plumbers, home builders, hairdressers, building contractors, cosmeticians and consultants.

By holding part of the payment as income tax and transmitting to the state, the Franchise Tax Board would borrow money during the year, instead of waiting for independent contractors who actually owe the money when they file income tax returns.

Even if this proposal is adopted by the CA legislature, it would probably be vetoed by Gov. Schwarzenegger, who has refused to sign on to such legislation in the past, because it does not create jobs and won't stimulate the economy.

Small business owners and those who are self-employed are the backbone of the California economy and should not be punished by this bad idea of increased income tax withholding.

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Harrison K. Long, Realtor & broker, Explore Group, Coldwell Banker Previews, Irvine, CA.  CA DRE #01410855.  ExploreProperties@gmail.com.  Lawyer member of the California State Bar Association - State Bar number 69137.  Helping People with their Best Decisions About Real Estate at Orange County, California. 

Posted via email from Explore OC Homes

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