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California Dreaming in Congress

November 05, 2009

California just jacked up its withholding rates to force people to overpay their taxes, because the State decided it needs the money more than the subjects do. Most people find this sleazy and outrageous, which means Congress finds it inspirational. Hence this confection at the end of H.R. 3548, the bill that extends unemployment benefits and the Homebuyer Tax Credit pinata:

SEC. 18. TIME FOR PAYMENT OF CORPORATE ESTIMATED
TAXES.

The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 in effect on the date of the enactment of this Act is increased by 33.0 percentage points.

What it means in English is that calendar-year corporations with $1 billion or more of assets have to overpay third quarter 2014 estimated taxes by 33.25%. They will recover it with a lower fourth quarter payment in December 2014, but that's after the current five-year Senate budget window ends, so as far as Congressional accounting is concerned, it never happens.

It's Congressional bookkeeping-as-usual, but accountants for Enron and WorldCom are rotting in jail for less.