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Guest Post: Welcome To The Predatory State of California--Even If You Don't Live There

Tyler Durden's picture


Submitted by Charles Hugh Smith from Of Two Minds

Welcome To The Predatory State of California--Even If You Don't Live There

Theft has been "legalized" for governments and banks in America.

Every once in a while an event crystallizes the stark reality behind the lacy curtain of propaganda and artifice. Here is one such event.

Correspondent R.T. is a retired accountant who has resided in Arizona since 2001. Prior to 2001, he resided in California.

On March 14, he received a letter from the California Franchise Tax Board (the agency that collects income taxes) claiming that he owed $1,343 for the tax year 2006. This was the first notification he'd ever received of this claim. This was an interesting claim given that R.T.:

-- Did not reside in California in 2006

-- Did not file a State income tax return in California in 2006

-- Did not have any outstanding tax issues with California in 2006

-- Did no business in California in 2006

-- Owned no property in California in 2006

The number $1,343 is also interesting, as R.T.'s total Federal tax liability in 2006 was $650. Since the top income tax rate in California is about 9%, and that only kicks in at relatively high income levels above $100,000 annually, then it's difficult to see how anyone could owe double their Federal tax in California state tax.

But the truly interesting part of the story is that the state took $1,343 out of R.T.'s Wells Fargo bank account on March 2, prior to notifying him of the claim. Wells Fargo charged R.T. $100 for handling the removal of his $1,343.

As R.T. observed: "If I had filed a 2006 California tax return the statute of limitations would have run out, but since I did not file a 2006 tax return there is no statute of limitations. This is the classic catch 22."

I do not have copies of the correspondence so I cannot verify this sequence of events, but I have corresponded with R.T. for many years and have found him to be a credible witness to national events. While some might claim he invented this story of state theft out of whole cloth, there is no basis in our years of correspondence to support that claim.

What is entirely believable is that the state of California, desperate for revenue, is churning out dubious income tax claims stretching back years and collecting the money without due process. This is theft, pure and simple, and charging the account owner $100 for transacting the theft is also theft.

Welcome to the predatory State of California--even if you don't live there. If any mainstream media journalist wants to pursue this story, email me and I will put you in touch with R.T.

Somehow I doubt this is a unique story. R.T. said he immediately tried to call the California Franchise Tax Board and was on hold for some time before his call was dropped. As of yesterday his attempts to contact the agency via phone were unsuccessful. Why are we not surprised by any of this? Perhaps it's because government/bank thievery and Catch-22 incompetence is now the backdrop of our culture.

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Tue, 03/20/2012 - 10:47 | 2273124 4realmoney
Tue, 03/20/2012 - 10:49 | 2273139 Sudden Debt
Sudden Debt's picture

20 written backward is 02


Tue, 03/20/2012 - 10:54 | 2273157 Joshua Falken
Joshua Falken's picture

The land of the free and the home of the brave is no more


The American people need to wake up and do something at the next election about the incumbent kleptocracy


No free elections - two warring factions both beholden to the same vested interest funding groups.  No presidential candidate can be shown to have the interest of the people at his heart apart from Ron Paul who will not be allowedto stand.

Privately owned central bank -  The Federal Reserve System of banks are privately owned and controlled by the same presidential funding group and are not a government agency. The Fed takes collateral and issues issues US Dollars against them, but not all of that collateral is issued by the US Treasury and the Fed ownership cartel act in their own interest and not necessarily the US people.


The MF Global bankruptcy shows that US Regulators and and the Dept of Justice have been corrupted by the same vested interest, Fed owning, presidential funding group, protecting Corzine, JP Morgan and Goldman Sachs from scrutiny.


America needs an overhaul of corrporate and banking influence over government as corruption is endemic on so many levels

Tue, 03/20/2012 - 10:59 | 2273179 MillionDollarBonus_
MillionDollarBonus_'s picture

"Theft has been "legalized" for governments"

Wrong. This is not theft. It is called TAXATION, and there is a BIG difference. The smartest wealthiest liberals from top college professors to esteemed Hollywood actors ALL understand this difference. But somehow libertarians still don't get it.

Tue, 03/20/2012 - 11:04 | 2273199 flacon
flacon's picture

Income Tax is detremental to an economy since it confiscates real wealth gained from productive output.

Tue, 03/20/2012 - 11:17 | 2273258 Hippocratic Oaf
Hippocratic Oaf's picture

MDB........you're getting weak.

Tue, 03/20/2012 - 11:33 | 2273340 Pladizow
Pladizow's picture

Same happened to me:

I have never resided in Cali, nor had any biz connection and recieved an income tax bill for $XX,XXX.00.

I explained this to them over the Phone several times and faxed back a response several times.

They then said I would have to provide proof and send them copies of my tax returns.

I told them fuck off & good Luck!

Tue, 03/20/2012 - 11:42 | 2273402 Troll Magnet
Troll Magnet's picture

california would be a great place to live if it weren't being run by a bunch of corrupt liberals.  

Tue, 03/20/2012 - 14:10 | 2274062 Esculent 69
Esculent 69's picture

Troll Magnet- "California would be a great place to live, but its been run by liberals who are corrupt and godless." There its fixed. Otherwise it's spot on

Tue, 03/20/2012 - 15:01 | 2274288 Troll Magnet
Troll Magnet's picture

could care less about the "godless" part but it's these tax & spend liberals who piss the fuck me off.  everywhere you turn it's tax, tax, tax and we have some of the WORST public employees in the world and our infrastructure's crumbling.  and they want to tax and spend, tax and spend, tax and spend while offering no decent service to its citizens, red tape everywhere you go as far as the eye can see and more taxation after taxation after taxation.  did i mention that we're being taxed to death here?  and they wonder why all these businesses are packing up their bags and leaving.  liberals are fucking retards.

Tue, 03/20/2012 - 19:43 | 2275271 LowProfile
LowProfile's picture

Hey, there's a bunch of corrupt conservatives running other states...  Why don't we ALL just drop the NWO propagated false left/right bullshit once and for all?

States should be allowed to be as liberal, conservative, statist or libertarian as the people want.  Then if you don't like your state, you can move!

The federal gov't should then make sure the state/local gov't isn't violating the respective people's Constitutional rights via corruption.

I know, what a concept...

Wed, 03/21/2012 - 03:38 | 2275999 francis_the_won...
francis_the_wonder_hamster's picture

"Hey, there's a bunch of corrupt conservatives running other states.."

I live in CA, and am disgusted by the political situation.  Locally, it was long ago overrun by developers.  Statewide, it is run by insider green a$$holes.  Nationally, we don't count.  But the rest of you had better pay attention to what happens here, because nobody can afford the bailout this state actually needs.

Tue, 03/20/2012 - 12:35 | 2273650 11b40
11b40's picture

Same thing happend to me several years ago.

They wanted to tax my company on commissions earned from a Califorina vendor, and we are on the East Coast.

Rather than bother with them, I just threw it in the trash.  This has been several years ago - at least 5 - and they finally gave up.

Unless you receive something that you have to sign for, just ignore it.

Of course, reaching in and removing funds from your bank account would be an entirely different matter.  All the more reason to find a small local/regional bank, or better still, credit union to do business with.  I have been planning to pull my corporate account from Wells Fargo, which was formerly Wacovia for me.  After reading this, I plan to do so immediately.

Tue, 03/20/2012 - 11:47 | 2273438 Dixie Rect
Dixie Rect's picture

Looks like Major Douche Bag is running out of material.

Tue, 03/20/2012 - 12:03 | 2273507 Chump
Chump's picture

Yeah I had to junk this one as well.  Gotta keep it fresh.

Tue, 03/20/2012 - 14:53 | 2274246 Taint Boil
Taint Boil's picture



I can feel a good 300-400 down arrow post coming soon from MDB. Everyone has a dry spell - just give him a chance.

Tue, 03/20/2012 - 11:05 | 2273200 Clueless Economist
Clueless Economist's picture

LOL...good one MDB...you are getter better, I was concerned as you had started to get stale.

"to esteemed Hollywood actors" I have more esteem for a steaming pile of dog shit than Hollywood actors.

Tue, 03/20/2012 - 11:07 | 2273219 Al Huxley
Al Huxley's picture

You're out of character Paul.

Tue, 03/20/2012 - 11:13 | 2273239 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Check this out Al; because ABBA said so....

Sweden moving towards cashless economy:


Tue, 03/20/2012 - 11:21 | 2273271 i-dog
i-dog's picture

You've gotta love the ATM in the church!! Says it all....

Tue, 03/20/2012 - 14:16 | 2274075 TruthInSunshine
TruthInSunshine's picture



The symbolism is epic.

Wouldn't Jesus have had an issue with that?

...money changers in the Temple 'n all?.....just sayin'


(One doesn't have to be Christian, belong to an organized religion, or even be a deist to understand Jesus's point)

Tue, 03/20/2012 - 14:21 | 2274097 GeneMarchbanks
GeneMarchbanks's picture

What'd you expect from Lutherans? *eyeroll*

Tue, 03/20/2012 - 11:29 | 2273326 Al Huxley
Al Huxley's picture

Wow, hard to know where to start with that one - 'digital money is better because it's safe from thieves'? and 'less graft because every transaction can be traced'?  What could go wrong with that.  I guess Swedes must still have some trust in their governments and banks.

Tue, 03/20/2012 - 11:53 | 2273469 Ol Man
Ol Man's picture

They just changed the kind of crime...

From further in the article...

"The flip side is the risk of cybercrimes. According to the Swedish National Council for Crime Prevention the number of computerized fraud cases, including skimming, surged to nearly 20,000 in 2011 from 3,304 in 2000."

And those especially adept at cybercrime are...

...bankers and government legislators...

Tue, 03/20/2012 - 12:39 | 2273665 JLee2027
JLee2027's picture

Sweden's "cashless" idea is financial rape waiting to happen.  I do believe that in the coming years - after the wipeout and reset - electronic money will be viewed as evil and outlawed or at least required to exist both electronically and in physical form on a 1 to 1 basis.

Tue, 03/20/2012 - 13:24 | 2273876 lemonobrien
lemonobrien's picture

I've been thinking about this; it allows gold and silver to be used in the underground economy.

Tue, 03/20/2012 - 14:54 | 2274088 TruthInSunshine
TruthInSunshine's picture

There will be SRT/SWAT precious metal task forces to relieve anyone of their holdings if The Bernank or his successor lose the fiat confidence game.

Despite inevitable cries of 'paranoia' by some in response to such claims, it is worthwile to note that empires are not immortal, fiat currency not tied to units of inherent value has a relatively short shelf life, and that this has happened many times before, and will happen again.

Tue, 03/20/2012 - 15:32 | 2274405 JLee2027
JLee2027's picture

Yes, a short half-life.

This one is stretching a LOOOONNNNGGGG time. Sinclair says 2015 before it completely dies. I couldn't imagine the funny money surviving w/o a real banking crisis of some kind until 2012, but it did. Unbelievable.

I am afraid these idiots are going to ride the car off the cliff accelerating all the way. Damn fools.

Tue, 03/20/2012 - 19:47 | 2275281 LowProfile
LowProfile's picture

Au Contraire, the average lifespan of a fiat currency is 40 years.

We are right on schedule!

Tue, 03/20/2012 - 13:52 | 2273990 The Mighty Monarch
The Mighty Monarch's picture

Here's my personal count for theft from physical vs. digital sources, in the 20 + years I've been working:

Physical cash stolen: $40 (wallet stolen out of the locker room in high school)

Digital cash stolen: $4000 ($3000 when my MasterCard ATM was cloned and my checking account cleaned out, $1000 from various cloned credit cards).

Yeah, smashing idea, that cashless society thing.

The best thing anyone can do for themselves right now is chuck that MC/Visa checking account card, and insist that your bank issue you a traditional ATM card.

Tue, 03/20/2012 - 13:55 | 2274001 Mesquite
Mesquite's picture

...because every transaction can be traced...

Sure worked well for Corzine, I see...


Tue, 03/20/2012 - 11:06 | 2273213 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Weak response.  Begin to use the word because to give your musings more purpose.

Tue, 03/20/2012 - 11:12 | 2273218 FEDbuster
FEDbuster's picture

Lesson learned?  Don't keep your money in banks.  They can't steal, what they can't find.

BTW Kalifornia grew by 10 million people from 1985-2005, yet the number of Kalifornia state income taxpayers only grew by 150,000 during that same period.  Kali is also the number one state in number of and percentage of welfare recipents per capita. 

Tue, 03/20/2012 - 11:34 | 2273355 fleur de lis
fleur de lis's picture

I wish that state would just break off and float away.

Tue, 03/20/2012 - 12:30 | 2273624 XitSam
XitSam's picture

Woot! Beachfront Yuma property.

Tue, 03/20/2012 - 13:54 | 2273999 The Mighty Monarch
The Mighty Monarch's picture

Arizona Bay (thank you Bill Hicks).

Tue, 03/20/2012 - 14:21 | 2274099 Esculent 69
Esculent 69's picture

fleur- hold that thought for a little longer. i haven't left just yet, but when i do I'll help you push the handle to flush this turd out into the Pacific. Maybe the only way they can survive is to discover the oil off our coast and actually use it.  What am I talking about these are liberals who would rather float of into the ocean and live on twigs and leaves rather than use oil.  Oh wait. There i go again. Had another Joe Biden moment.  Stand up for Chuck!


Tue, 03/20/2012 - 16:45 | 2274709 Umh
Umh's picture

I thought the paradigm was sink;)

Tue, 03/20/2012 - 12:07 | 2273526 boiltherich
boiltherich's picture

I am forced to agree, I was born there (1958 on the far north coast within sight of Brookings Oregon) and in all my memory of the once great place I have to admit, it peaked in 1968.  In her defense I will say that of all the things that brought California down the very worst single one of them was not self inflicted, it was illegal immigration which is a federal jurisdiction but the costs associated with illegal immigration are mostly a state burden.  If states could/would calculate all costs associated with illegal immigrants and had the legal right to simply bill the federal government for them I assure you the federal government would have started enforcing borders and immigration law decades ago, but the left was too politically correct to do anything about it and the right used illegals as a weapon against unions and fair wages.   

I no longer live in California.  Unless you are so wealthy cost just does not matter, or you qualify for HUD and food stamps and are so poor taxes are not an issue, there is no place for you there.  Both of those segments of the population now outnumber middle class residents.  My homeland, the state I used to love, I loath even to drive through it to get to other states now.  But, before people pick on California as Taxifornia please keep in mind, what happens there will happen in your state in time, Oregon will get a sales tax, Florida will get an income tax, car registration where you are will rise to the stygian heights they have in the Golden State, when I bought my BMW in Oregon I went to the CA DMV website out of curiosity in case I wanted to move back over the border to my home state, they have an online fee calculator for your DMV bill, had I moved back prior to one year after buying that car it said my bill to the state for registration and sales tax (which Oregon does not have) would be $10,127.  Just to be road legal.  The next year, 2010, my registration renewal/tags would be $866.  Even now 3 years later the cost if I move to CA would be $352.

Total paid to the state of Oregon for the right to drive that car in this state= $0.00.  (disabled vets pay a one time $15 for a permanent lifetime registration for one vehicle transferable as they change cars over the years). 

Tue, 03/20/2012 - 14:25 | 2274123 PrintPressPimpin
PrintPressPimpin's picture

yes very true indeed.  As i drive up to my place in the woods sometimes and witness the hordes of illegals coming back from working in the winerys sometimes i feel enraged.  Sometimes i honk incessantly and make threatening gestures out my car window.  Lately i have found peace and solace in the fact that their time is coming.  I calmly explain this to all the locals up there that this problem will resolve itself soon.  The mexicans will be forced back south even here in mexifornia.  The writing is on the wall and the economy is on the edge..  I can see the frustration mounting among those who realize the gig is up.  I am welcoming the collapse.  I dont even feel that prepared but when i look at all these illegals and affluent folks like my pops  living high on the hog I realize they are not prepared at all.. They have no idea what comes there way.  Soon a revolution will be fought against the injustices of crony capitalism, illegal immigration and wealth disparity.  California is such an amazing place north of the golden gate it really is a shame that these illegals are popping up in the most unlikely places.. but there time is coming.. the hatred grows within and all around.  An easy scapegoat they are

Tue, 03/20/2012 - 14:37 | 2274181 ceilidh_trail
ceilidh_trail's picture

BTR- How right you are. I live in the Greater Cincinnati area. Up until 5 years ago, you would only see latinos in crop working season. Now, it is like a dyke broke; they are absolutely EVERYWHERE. They are all over the inner city, pushing strollers, crossing the street where ever and whenever they choose, regardless of traffic. In the old days, they would not make much eye contact. Now, a glower and a dare to a challange. They have no fear of deportation, no fear of arrest. I see more and more of them driving vehicles newer than mine- probably because they pay no/minimal tax.  They show up in my hospital with fake ID and claims of "nospeekadee english", and typically false addresses. The rest of us pay for this crap and have NO RECOURSE, because the DHS/INS refuses to go after them. Even under Bush, I know of a cop who raided a house of about twenty of them. He got in touch with the feds-"Don't call us unless you have a hundred of 'em". The absolute refusal to enforce our laws- immigration, financial, criminal, pushes us ever more to being over the abyss. From my perch, I see the law being used as a club for the benefit of those in power, and the rest of us serfs can go to hell.

Tue, 03/20/2012 - 16:46 | 2274716 Umh
Umh's picture

We appear to have ZERO chance of reasnable immigration laws!!!!!!!!!!!!!!

Tue, 03/20/2012 - 11:12 | 2273237 true brain
true brain's picture

Hello my troll friend. I missed you and your sarcasm. It's funny in a twisted way, not quite George Carlin, but funny nonetheless.

Tue, 03/20/2012 - 11:17 | 2273254 IAmNotMark
IAmNotMark's picture

Did you read the article?

Did you read that the man did not owe the tax? 

Did you read that the state took the money from the man's bank account before informing him? 

Did you read that the bank took an extra $100 for the transaction?

I guess not.

Tue, 03/20/2012 - 22:36 | 2275637 JPM Hater001
JPM Hater001's picture

I predict future historians will no doubt say, "And 5 minutes after Zerohedge posted it, the market collapsed."

Tue, 03/20/2012 - 11:27 | 2273308 Uncle Remus
Uncle Remus's picture

Jesus. It's an oxymoron-palooza.

Tue, 03/20/2012 - 11:35 | 2273329 fleur de lis
fleur de lis's picture

No $, somehow you still don't get it. The IRS scam was conjured up at the same time as the Fed scam to rip off Americans and fund their racket. The racket has expanded with more and more employees and hangers on feeding at the trough and now they are running low on free food.

So never having had to work an honest day in their lives or produce anything of the slightest value, they do what they have always done to survive -- steal from us and justify it by waving a badge.  

Most top college professors are perfectly happy to keep the status quo not because they're smart or even informed but because it serves their purposes. As for Hollyweird please inform us as to the percentage of intelligent life or at least cultural contribution.


Tue, 03/20/2012 - 11:36 | 2273373 Antipodeus
Antipodeus's picture

"MillionDullardsBogus" ... did you actually read the article?


Wed, 03/21/2012 - 00:12 | 2275805 MeelionDollerBogus
MeelionDollerBogus's picture

hey, check out the name I chose :D

Tue, 03/20/2012 - 16:37 | 2274685 Umh
Umh's picture

Even if you're a troll you're an ass......

Do NOT follow this link or you will be banned from the site!