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    Sunday, May 05, 2024

    Tax advice ignored, creating more inequity

    In 2015, a State Tax Panel of non-partisan civic leaders was commissioned to evaluate Connecticut's taxation laws. The first recommendation in the panel's Dec. 31 report concerned pension income taxation: "tax all retirement income including military and teacher retirement income similar to the state’s treatment of social security income."

    Seemingly unaware of the State Tax Panel's efforts, the 2015 General Assembly voted to extend the military pension exemption from 50 percent to 100 percent. The Assembly also passed legislation to phase in by 2018 a 50 percent exemption of pension income for retired teachers. Both exemptions apply to the entire pension amount. Six figure pensions of senior flag rank officers as well as school superintendents and college professors are eligible for the 100 and 50 percent exemptions.

    Contrary to the State Tax Panel recommendation to equalize pension tax laws, the Assembly kept unchanged taxation of all other retirees. While military and teacher exemptions are uncapped, the Social Security exemption remains capped at $60,000 filing jointly.

    Legislators seeking re-election will soon visit your neighborhood. If Connecticut's pension taxation laws seem inequitable, ask the candidates if they have read the 2015 State Tax Panel report. Ask them if all pensions were taxed like Social Security, could the additional revenue prevented some of the nickel-dime budget cuts impacting social programs and layoffs. Demand an answer, then accept the glossy brochure.

    Mike Gouzie

    Ledyard