Georgia already allows one of the most generous income tax breaks for pension benefits in the nation, exempting the first $35,000 of retirement income. Now lawmakers are pushing a constitutional amendment that would increase this exemption to as much as $100,000. A critical analysis of the Georgia plan is here.
Georgia lawmakers aren't alone in looking for ways to give older Americans with lots of retirement income tax cuts. See Talking Taxes blog posts earlier about the debate that is raging in Iowa to eliminate taxing all retirement income. Deciding what type of income to tax should ultimately be a decision about fundamental tax fairness. Of course, it's politically popular to ensure that seniors don't pay tax on some of their income, but it's certainly not the FAIR thing to do - especially if these tax breaks apply to the wealthiest seniors.
For national perspectives on how best to design tax breaks for seniors, check out what ITEP and the Center on Budget and Policy Priorities have to say.
Parts of this post were originally published in CTJ's Tax Digest, a weekly email that highlights state and federal tax trends across the country. If you'd like to subscribe to the digest send an email to: ctj@ctj.org