This month, anyone paid a wage in California should notice a few dollars missing from their paychecks.
For some the annoyance stirs fear that withholding more for income taxes might hinder the economic recovery.
"It's not a good thing," said David Pacheco, an electrician who lives in Riverside. "I think it's unfair. They're already taking enough money, don't you think?"
Starting Nov. 1, California employers are required to withhold 10 percent more in state income taxes to help ease the state's budget problems. Wage earners will get the withholding back either through a tax refund or a reduction in the balance due when they file their taxes April 15.
Scott Willsea, CEO of PayCare Inc., a payroll service in Riverside, sent out a letter to his clients notifying them of the withholding before it took effect. Nonetheless, he still received calls from clients who either didn't read the letter or didn't understand that the withholding is not a tax increase.
He expressed concerns that small businesses were not notified by the state of the change and could face fines if they have not implemented the withholding in their payroll. He said most payroll services did not learn of the withholding until recently.
"The lion's share of employers in the Southern California area are under 100 employees, and most don't outsource payroll," Willsea said. "Those would be the people who would be at the highest risk for not being in compliance."
A single person earning $34,000 a year, claiming one allowance, will see withholding bump up by $1.67 a week. A married couple earning $145,000 annually with no allowances will see a difference of $16.90 a week.
For those living paycheck to paycheck, the withholding could seem like a burden. There has been speculation that consumers may curb their holiday shopping as a result.
Debbie Boeddeker, a state employee who works in Riverside, opposes the 10 percent increase.
"They should lower taxes, so people will spend more money and stimulate the economy," she said.
Karlene Bond, also a state employee, said she agreed because a number of government agencies have already implemented furloughs. The additional withholding will likely hit people hard, she said.
"It's not going to help any," Bond said. "It's just a short-term loan for the government. It doesn't solve any of the problems with government spending."
Michelle Elliott, who owns the Orange Blossom Cafe with her husband, James, said the withholding increase for their six employees' paychecks hadn't been a problem because they use a payroll service.
Her father, Les W. Rood, who works as the cafe's support staff, said he opposes the withholding and would prefer to see an increase in sales tax combined with a decrease in income tax and business tax.
"It's a proven fact when you drop income tax and when you drop business tax, you raise money because people have more money to spend," he said. "It's amazing we have educated people in our government who don't know this."
