DEAR EDITOR:
I believe the state (Democratic Assembly and Senate) has put in
place a
”
ticking
”
tax time bomb, when they passed into law under Gov. Davis, the
California State Paid Family Leave Program.
DEAR EDITOR:
I believe the state (Democratic Assembly and Senate) has put in place a “ticking” tax time bomb, when they passed into law under Gov. Davis, the California State Paid Family Leave Program. This act was passed into law but the start date was not until January 1, 2004 for taking .08 percent of a workers wages (on earnings up to $68,830), a maximum deduction of $55.60 per year.
I believe this act will just be that start of giant tax increases to support the system once people start using the benefits. I don’t see any other outcome for the following reasons:
1. Workers can apply for up to 6 weeks paid leave at 55 percent of their weekly wages up to a maximum of $728 per week for claims starting July 1, 2004 and $840 for claims starting Jan. 1, 2005. A person earning the $68,830 will be able to take the six weeks of paid leave at the $728 per week amount for bonding with a newborn, care for a parent, child, spouse or domestic partner. This leave can be six weeks in any 12-month period with no limit on the number during a person’s work career.
2. At $728 per week or six weeks for a total of $4,368 a worker will take 78.6 years to pay into the system what they can take out in one episode. Since most workers will work a maximum of 40 years, I don’t believe the system can support itself at the present tax rate/payout structure.
3. Assuming 10 million workers at an average pay of $34,415 will pay in $275.3 million a year ($27.53×10 million) it will only take 1.26 percent of the workforce to empty the system.
4. I can easily see where the average worker who has two parents, a spouse, 2 children could end up using the system for a minimum of five times during their work lifetime. If this happens a worker at the $728 level, will take out $21,840 while only contributing a total of $2,224.
5. People will easily find ways to abuse the system. An elderly mother or father in Florida becomes ill and gets a doctor order for the working son or daughter to come and take care of them for the six weeks. Could there also be a little vacation time worked into this little episode?
6. The California Workmen’s Compensation Program is already full of abuse and cost problems and this program will come out of the same bucket of money. This program will just add to the ability to abuse the taxpayers of the state of California.
Jim Hallum, Gilroy
Submitted Tuesday, June 15
The Golden Quill is awarded occasionally for a well-written letter.
