Ed Driscoll

California Demands $55 Million from Microprocessor Inventor

Oh, that punitive liberalism:

Under California law, the Franchise Tax Board has the “presumption of correctness,” meaning that the onus always is on Hyatt to disprove what the tax officials say. And, he argues, they keep changing their stories and their allegations, thus resulting in more years of legal expenses and disputes.

“It’s ruined my life. They keep coming up with these intensive positions, many hundreds of pages of allegations and such that we have to try and disprove decades later and it’s just very consuming,” Hyatt told me in an interview last week. “The FTB is out to get taxpayers’ money and it will go to extreme ends to get money whether it is entitled to it or not….”

The state controller’s office has yet to review the newly filed lawsuit. But former Board of Equalization member Bill Leonard, a former Republican Assemblyman, believes the state government is abusing rules designed to give taxpayers every opportunity to appeal a judgment to drag out a case against a taxpayer. The Legislature could fix the problem with a law granting a right to speedy trial on tax matters, he added.

It’s hard not to conclude that California’s tax agency is out of line as it continues to run up administrative and legal fees — not to mention risking potential multimillion-dollar liabilities — to pursue a decades-old dispute over where a taxpayer lived for six months. There’s a troubling lesson here for wannabe entrepreneurs, who might want to think carefully about their residency before they hit the big time.

Read the whole thing.

So in-between shaking down entrepreneurs and inventors, how’s California doing managing its own money?

Calpers also notes that “the economic impact of CalPERS benefits far exceed initial taxpayer contributions.” Lo, the fund claims to return $10.85 in “economic activity” for every dollar taxpayers contribute, which would make public pensions the best government stimulus of all time.

Their crude economic calculation is something to behold. The fund estimates that employer contributions account for 22% of every dollar in pension benefits, which would equate to $2.8 billion for the fiscal year 2011. Calpers then contrives a 2.39 “multiplier” from a “Social Accounting Matrix” to compute that its $12.7 billion in annual retiree payments generated $30.4 billion in economic activity and 113,664 jobs—more than a third of the state’s employment growth that year.

Note: White House economists used a multiplier of a mere 1.5 to arrive at their off-the-wall estimate that the stimulus program would create 3.7 million jobs.

Here’s a more honest accounting of Calpers’s economic “impact.” California taxpayers have sunk about $70 billion into Calpers over the last decade, which they otherwise could have spent on more productive enterprises or pursuits. For every one dollar workers contribute to their retirement, taxpayers are investing two. Local sales and property taxes have risen to pay for increasing pension payments. Public workers have also been laid off and infrastructure delayed—all of which has depressed economic growth.

Why, it’s as if Sacramento is absolutely determined to transform the formerly Golden State into the next Detroit.

Related: “Republican National Committee Marks Tax Day by Suing IRS,” Bridget Johnson writes at the PJ Tatler.