Let me start by categorically stating that this post is in no way intended to diminish the work done by field agents and others whose job it is to enforce submission of NC sales, wage, and income taxes. Their job is necessary and in many cases, thankless.
Rather, my gripe is with the larger concept of "the state", and how often double standards apply. For example, the state legislature has the power to encourage or discourage tort cases in the legal system, yet is exempt in most cases from being sued by citizens.
And now, with the current NC budget crisis, the State is delaying tax refunds as they wait for other taxes to be remitted-- to cover the cost of the refunds. Put the shoe on the other foot. To my knowledge, there are automatic penalties and interest assessed to individuals and businesses who not remit their state taxes in a timely manner. I do not believe the NC Dept. of Revenue offers a payment plan for business entities in arrears, as does the IRS, and getting interest and penalties waived is no easy matter.
On the other hand, the State seems perfectly content with delaying the money due its citizens; and we are not being paid interest or penalties while the government holds on to our money. Having worked in an industry where a garnishment from the Dept. of Revenue can wipe out an account in a matter of seconds, this seems grossly unfair. In short, a business or an individual having "cash flow" problems through poor management of their finances would not be afforded the same opportunity to get back on track as the State has utilized to cover their own misspending and financial ineptitude.
One might argue that people who over withhold are not subject to special treatment, but we all know given the complexity of the tax code, there is no way for an individual or a business to withhold the exact amount they owe in taxes over the course of the year. Underpayment can trigger penalties, so most individuals play it safe and over contribute.
When government blatantly creates a double-standard in their behavior, one wonders why the citizenry is so docile and takes such behavior in stride. Certainly, there should be more anger, hopefully expressed at the polls next election than we are witnessing today.
3 comments:
Doesn't NC have to pay interest if they take more than 12 weeks (past 4/15) to pay a refund?
I agree they should be penalized, but they'd just tax us more to make up for it.
The interest rate kicks in on 6/1 for returns filed on or before the deadline. I cannot find on DOR's site what the interest rate will be. Delinquent state taxes run about 6.5%, plus a severe penalty that varies with the time period and amount. I will bet we will not receive anything near 6% on our refunds, nor will they be compounded the same way.
You are right about them raising taxes to offset, such is the power of the purse.
a few years ago DOR changed policies and made me start paying witholding taxes monthly instead of quarterly. A change of office managers occurred and I forgot but was quickly reminded with a $50 penalty. I told them that I was through collecting their's and the IRS money for them. That it costs me thousands of dollars a year to collect, report and keep track of their money without getting reimbursed. The person I talked with started laughing and said she would wave the $50 penalty but I better not try and be reimbursed for my trouble. She promised that it would come back to bite me. Now I still pay someone to file paper work every month even though I have not had an employee in 2 years thanks to the building slowdown. The General Assembly is contemplating extending the sales tax to services like lawn cutting. It will cost the owner more to file paper work and keep track of records than the taxes he collects. It will bring on the underground economy and everyone will start de3aling in cash again.
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