This is now old news, but I haven’t seen much discussion of it. California enacted a non-tax (interest free loan) on lazy people. They changed the withholding amount, but not the tax rate. As a consequence, people using the default withholding rate will see less of their paycheck.

I manually set my withholding and can change it by logging in to a website (ADP). My withholding rate is set higher than the default because I don’t like getting screwed by capital gains at the end of the year and don’t like paying estimated taxes quarterly. It’s much less hassle to simply boost my paycheck withholding.

There is nothing stopping anyone from countering this upward adjustment by the state.

Savvy taxpayers can get around the state’s maneuver by increasing the number of personal withholding allowances they claim on their employer tax forms, said Brenda Voet, a spokeswoman for the state’s Franchise Tax Board.

“People can get out of this,” she said, noting that most people would have to change their allowances through their employers. California’s budget leaders are banking on the hope that most won’t.

My guess is that this will disproportionately hit poorer people. I’m going to make the blanket assumption that the less someone makes, the less savvy they are about the voodoo that goes on with their paycheck.

Update

Don’t say something stupid like “I haven’t seen much discussion of it” before you watch the evening news. This was discussed on every station tonight.