NBC Highlights Plight of Overtaxed Californians After Withholding Increase

On Sunday's NBC Nightly News, correspondent Chris Jansing filed an unusual report which took a sympathetic look at California taxpayers who are having trouble affording a recent increase in the amount of taxes withheld from their paychecks, as she described the situation as taxpayers "footing the government an interest-free loan, and a lot of people aren't happy about it."

The NBC correspondent used several soundbites of average Californians -- one man even earning minimum wage -- who complained about the situation, with one man comparing the government to a "mafia," and another seeing the government as being like children who think their parents are an endless source of money.

Anchor Lester Holt relayed the "unwelcome surprise" from the government as he set up the story:

Money is tight in these challenging economic times, perhaps nowhere more so than in California where a crushing deficit has prompted something new – a 10 percent increase in that state's withholding tax. And it has been an unwelcome surprise to millions of taxpayers.

After two soundbites of women who were shocked by the news, Jansing filled in viewers on how the plan works, as the government would withhold more money which would be returned when taxes are filed. Jansing: "The plan is to give the money back at tax return time. In other words, taxpayers are footing the government an interest-free loan, and a lot of people aren't happy about it."

Then came a soundbite of minimum wage worker Brian Foster as he slammed the government as being like a "mafia." Foster: "It's the government. They're like the mafia. They can do whatever they want. I mean, you know, I only make minimum wage."

After devoting a moment to the opposing view, including a soundbite from State Assembly Speaker Karen Bass as she argued that "we needed the extra money right now so that, frankly, the situation wouldn't even be worse," Jansing concluded her report with another man expressing an unflattering view of the government:

CHRIS JANSING: With many businesses already feeling as if they’ve got a case of pneumonia, Robert Smith has a message for politicians: Grow up.

ROBERT SMITH, CALIFORNIA RESIDENT: Your kids don’t think there’s an end to your pockets, that you can just reach in and pull the money out. And the government seems to be the same way.

Below is a complete transcript of the report from the Sunday, November 8, NBC Nightly News:

LESTER HOLT: Money is tight in these challenging economic times, perhaps nowhere more so than in California where a crushing deficit has prompted something new – a 10 percent increase in that state's withholding tax. And it has been an unwelcome surprise to millions of taxpayers. Our report from NBC's Chris Jansing.

CHRIS JANSING: At McDonald’s Hearing Aid Center in Sacramento, employees can't believe their ears-

UNIDENTIFIED WOMAN #1: No, I had no idea.

JANSING: -or their paychecks.

UNIDENTIFIED WOMAN #2: I was definitely surprised.

JANSING: During the legislative battle over California's huge deficit, lawmakers quietly added a new provision, withholding 10 percent more state taxes -- and it's just now kicking in. For a typical family of four making $90,000, taxes would go up as much as $368 a year. For a single person, about $211. The plan is to give the money back at tax return time. In other words, taxpayers are footing the government an interest-free loan, and a lot of people aren't happy about it.

BRIAN FOSTER, BARTENDER: It's the government. They're like the mafia. They can do whatever they want. I mean, you know, I only make minimum wage.

JANSING: Like restaurants across the country, business has been down at J.J. Brewky 's in Camarillo, and, like other businesses, the upcoming holiday season will be key to turning a profit this year.

JEFF WALKER, J.J. BREWSKY’S: I think it's the wrong time to be doing this. There's two things that affect the restaurant business. It’s disposable income and consumer confidence, and I think clearly this is a detriment to both.

JANSING: And critics argue the impact will be felt well beyond California by offsetting any possible benefit from the federal economic stimulus plan, and California is by far the largest state economy in the U.S. Already lawmakers are getting an earful from taxpayers.

STATE SENATOR TONY STRICKLAND (R-CA): They're just frustrated. They’re angry.

JANSING: Here's what the Democrats are saying. The supporters are saying it's a few bucks.

STRICKLAND: Well, tell that to my constituents who are having a tough time making ends meet. They don't have the dollars already.

JANSING: But, facing the biggest loss of revenue in California history, supporters say there was little choice.

KAREN BASS, CALIFORNIA STATE ASSEMBLY SPEAKER: And so, we needed the extra money right now so that, frankly, the situation wouldn't even be worse.

JANSING: There's an old saying that when California sneezes, the country catches a cold. With many businesses already feeling as if they’ve got a case of pneumonia, Robert Smith has a message for politicians: Grow up.

ROBERT SMITH, CALIFORNIA RESIDENT: Your kids don’t think there’s an end to your pockets, that you can just reach in and pull the money out. And the government seems to be the same way.

JANSING: Chris Jansing, NBC News, Camarillo, California.