• Home
  • Posts
  • Op-Ed: State Income Tax Exemption for retirees isn’t deserved

Op-Ed: State Income Tax Exemption for retirees isn’t deserved

By Chris Powell

Why is there such support in the General Assembly for exempting retirement income from the state income tax?

Social Security and pension income is already exempt from the state income tax for single filers with incomes less than $75,000 and couples with incomes less than $100,000, and state Sen. Cathy Osten, D-Sprague, proposes to exempt [ITALICS] all [END ITALICS] retirement income.

The idea is that exempting all retirement income will encourage retirees to stay in Connecticut instead of moving to warmer and income-tax-free states like Florida and Texas. But of course such a rationale could apply to [ITALICS] all [END ITALICS] taxpaying Connecticut residents. It is a rationale for repealing the state income tax entirely.

Other than their potential to constitute another special interest for politicians to pander to and draw campaign contributions from, what makes retirees so deserving of favor? Income is income, whether derived from wages, savings, investments, pensions, or Social Security, and federal and state policy, pursuing fairness, long has imposed progressive taxation on most income — that is, higher rates on higher incomes.

So why should someone in Connecticut with $200,000 in retirement income pay less in income tax than someone with only $75,000 in wage income? While many retirees are poor, progressivity in income taxation protects them just as it protects all poor people, even as older people are the wealthiest age demographic in the country, many owning their homes free and clear, having discharged their mortgages.

Meanwhile younger people may have rent or mortgages to pay and children to raise — the taxpayers of the future.

Connecticut can respect its elders without disparaging everybody else.

Chris Powell is a columnist for the Journal Inquirer in Manchester, Connecticut. (CPowell@JournalInquirer.com)

Related Posts
Loading...