As media stories increase regarding the State of California potentially issuing IOUs in coming months, many astute reporters seem to have completely missed a significant point.
News references have consistently lumped possible IOUs for State employees, vendors, taxpayers, and social services such as student aid, mental health and other welfare programs into the same basket. An IOU is an IOU, apparently.
However, an important distinction exists that simply should not be ignored in this “horn of un-plenty” situation. An IOU for a State program is quite different than one for a tax refund.
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January 18th, 2009 at 12:00 am
Here’s one. I expect to get an IOU from the state, however, my mother will, more than likely, owe the state. I plan on endorsing the IOU that I receive, to my mother, who will use that IOU to help in paying her taxes. May I suggest that we all do this. If the state wants us to accept their IOU, then they must accept it back.
January 18th, 2009 at 12:00 am
Good idea, Roger. Of course, if the legislative majority were to propose some similar concept as a means to close the budget shortfall, it would be called a revenue neutral tax increase.