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re: Time to end state tax free treatment of government employee retirements
Posted on 11/29/16 at 12:46 pm to I B Freeman
Posted on 11/29/16 at 12:46 pm to I B Freeman
Govt pensions are not taxed in LA because social security is not taxed in LA either. Most govt pensions are in place of social security because the employee didn't pay into social security.
If you are concerned about equality between government and non-government employees, you could place a cap on the tax-free treatment of these benefits, equal to the max amount of social security benefits paid during a year. The max is around 32K a year currently, and could be subject to annual adjustment. This is not hard to do.
But let me pour some gas on the fire.
Old people sit around and complain about lazy no good mooching millennials. Yet, these same old people get tax free treatment of their pension payments, get appraisal freezes on their personal residences, etc.
I would get rid of all of the retirement exemptions. Pay tax on all retirement benefits.
Look into the benefit offsets.
If you are concerned about equality between government and non-government employees, you could place a cap on the tax-free treatment of these benefits, equal to the max amount of social security benefits paid during a year. The max is around 32K a year currently, and could be subject to annual adjustment. This is not hard to do.
But let me pour some gas on the fire.
Old people sit around and complain about lazy no good mooching millennials. Yet, these same old people get tax free treatment of their pension payments, get appraisal freezes on their personal residences, etc.
I would get rid of all of the retirement exemptions. Pay tax on all retirement benefits.
quote:
That rationale fails on two points--social security income is capped and many state retirees do get social security from other jobs they had so they are double dipping.
Look into the benefit offsets.
1
Posted on 11/29/16 at 12:57 pm to LSUFanHouston
quote:
Govt pensions are not taxed in LA because social security is not taxed in LA either. Most govt pensions are in place of social security because the employee didn't pay into social security.
If you are concerned about equality between government and non-government employees, you could place a cap on the tax-free treatment of these benefits, equal to the max amount of social security benefits paid during a year. The max is around 32K a year currently, and could be subject to annual adjustment. This is not hard to do.
Yep, that is basically what I proposed. Problem is retired state employees will complain (I don't blame them, I would too). So politics mean this won't happen.
quote:
Old people sit around and complain about lazy no good mooching millennials. Yet, these same old people get tax free treatment of their pension payments, get appraisal freezes on their personal residences, etc.
I would get rid of all of the retirement exemptions. Pay tax on all retirement benefits.
As long as you phased it in, I would be OK with that. People that made retirement plans under one set of assumptions and bought condos, moved, etc; would have a big disruption if every penny of their retirement was suddenly taxed.
I would still prefer a uniform capped exclusion, like you mentioned above or like I stated earlier.
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