Tax Defaulters In California Cornered

Do you reside in California but still owe State tax money? Presumably by now, many are getting used to alternative means of transport. On October 4, 2011, California Governor Jerry Brown signed into law, a bill that authorized the revocation of the driver’s licenses of the State’s 1,000 most egregious tax debtors, unless they clearly come up with tax repayment plans with the Franchise Tax Board or State Board of Equalization. This latest move is aimed at ensuring that the estimated $6.5 billion unpaid state income and business taxes is paid up.

The California Department of Motor Vehicles can now access information on the tax defaulters list from state tax officials to facilitate the revocation of such licenses. Shockingly, roughly $155 million is owed by the top 250 people and businesses on the state’s delinquency list. More to that, a Los Angeles couple has accumulated the largest outstanding bill in personal income taxes, amounting to a staggering $14.2 million!

It was only this summer that a similar auto/tax bill program was put into effect on the East Coast, and the drivers there are still getting used to it! Elsewhere, to close an approximately $1.3 billion budget gap in Maryland, the lawmakers agreed on June 1, 2011 to make driver’s licenses and vehicle registrations contingent on motorists’ tax compliance.

Taxes related to vehicles are increasingly becoming common in America. This is not by accident, but a deliberate move to leverage Americans’ passion for cars. Other taxes, like the fuel taxes, are usually collected at both the Federal and State levels. At this rate, we should be prepared for more vehicular taxes; it all depends on the fuel pump prices and the political landscape. Don’t be surprised if gas taxes are raised or gas tax holidays introduced for drivers; it is all a matter of time.

If you drive a hybrid car, you can still enjoy some individual income tax credits, though not for long. However, there are still more tax breaks available for other alternative fuel vehicles. To date, the urban and sub-urban dwellers are still fighting because of commuter taxes.

Some tax advocates are happy with the by-the-mile tax proposals. Although official talks about a possible per-mile tax appear to have been suspended, it is only a matter of time before it re-emerges.

One would wonder why there is so much fuss about vehicle-related taxes. It is simple; America has over 200 million licensed drivers whom are all eligible tax payers. The logic is, the more taxes the government squeezes out of tax defaulters, the more money for its treasury! And with the biting recession, nothing is more important to the government than a steady flow of revenue!