Friday, August 24, 2007

California to suffocate its gay couples in tax paperwork and red tape

California has had domestic partnerships for quite some time now.

Unfortunately, Rex Wockner reports that state's bureaucrats were snoozing on the job the entire time, and as a result, have just realized that due to the nature of California's income tax system, California gay couples might have to file THREE state tax returns (two California and one fake federal "pro forma" return) in a year instead of just one return sent to the state. That's in addition to federal tax forms.

In short, average LGBTQ California families will have to file five tax returns with the state and federal governments, while heterosexual California families will only have to file two.

One fix under consideration is for registered California couples to do their federal income taxes three times -- their two real returns, and then a third, fake return, as a married couple. They could then use a number from the fake return to begin their joint state return.

Barrett noted that the Franchise Tax Board prefers to call the proposed fake federal return a "pro forma return."

There's a great rush by state bureaucrats to ensure that "tax software professionals," "the tax preparation community" and the endless legions of other wealth-consuming red-tape-splicers that California's convoluted tax system has created can deal with all the new bureaucratic adaptive policies and temporary directives that this problem causes.

The specific cause?

Since the federal government doesn't recognize gay couples in any way -- be they married or domestically partnered -- such couples have to file their federal taxes singly, as unmarried.

Then turn around and file in California as married.

But how does one do that, given that the first number you put on your state income tax form is a dollar amount from your federal return?

So much for the faux-libertarian frauds who insist that DOMA is "about states' rights and doesn't impact the rights of gays on a state level in any way."

Still think that DOMA advocates aren't advocating separate and unequal treatment for gay couples? Read on:

A third option -- which will be mandatory if no California laws are changed before Jan. 1 -- is to add the adjusted gross incomes from the separate federal returns and just use that number to begin filling out the California married return.

But the FTB is leaning against this option because some registered partners would unfairly pay more taxes this way than they would under other approaches.

Oh, well that's a relief. They're "leaning away" from the presently mandatory requirement for filing -- which costs gay people more than straight people.

In the article, California's Franchise Tax Board representatives groan that there's no ideal solution, while making it very clear that it's going to be a very rough tax year for California's LGBTQ families.

But they are wrong.

How about marriage equality instead -- so that gay people don't get tied up in layers of red tape and have bureaucrats' incompetence put their assets at risk? The level of complexity, bureaucratic nightmares, snarls, regulatory juggling and other gobbledygook going on with this, that simple change would save LGBTQ families in California lots of money and frustration -- and would reduce the workload of the state's bureaucrats.

Even better, how about getting rid of the state income tax altogether, so that this isn't an issue?

They'll get right on those suggestions, I'm sure. After all, they're clearly aware that government works for the people, people don't work for the government.


(Your friendly blogger isn't holding his breath).