海角大神

Alec MacGillis聽argues for Slate that "Veterans Should Pay Taxes Like Everyone Else."聽As a veteran who has paid taxes just like everyone else for the 23 years since separating from the military, I鈥檇 say we聽do聽and agree that we聽should.

Apparently, though, 鈥淎 growing number of states have moved to, or are considering, exempting military pensions from state income taxes. As the聽Wall Street Journal聽reported on Thursday, no fewer than 19 states are now considering legislation to create or expand tax breaks for veterans, with 65 bills toward that end pending in state houses.鈥� Furthermore, 鈥淎lready, nearly half of all states don鈥檛 tax military pensions at all (this includes the seven states that don鈥檛 tax personal income, period), and 20 more states partially exempt them; there are only seven states left with no exemption for veterans. 鈥�

MacGillis is conflating veterans 鈥� those who simply served in the military, such as myself 鈥� with聽those聽drawing pensions聽after 20 or more years of service or because of a service-connected disability. They鈥檙e different categories.

Now, generally speaking, I think we should tax military retirement pay and either shouldn鈥檛 tax or should means test disability benefits for veterans. MacGillis and I are more-or-less in agreement that retired senior officers, in particular, can afford to contribute to the tax coffers of the states in which they 鈥渞etire鈥� and that the arguments for treating military retirement differently from other income don鈥檛 really wash. They鈥檙e a combination of special treatment in the 鈥淭hank you for your service!鈥� category and, more importantly, a competition for well-trained 40-somethings who have a choice as to where to settle after service and spend $50,000 or so in pension income plus whatever they earn in their follow-on job.

Not mentioned by either MacGillis or the linked WSJ piece, however, is an important fact: the exemption applied to military pensions is generally also offered to other pensions. I鈥檓 aware of this because my late father was a military retiree and benefited from a couple of聽court rulings聽a few years after his retirement:

My dad retired in place in Alabama, which was his last duty station, in 1983. His pension was taxed by both the federal government and the state of Alabama, minus the 40% that came from the VA in the form of offsetting disability pension. Pursuant to those court rulings, Alabama had to stop taxing the remaining 60% of his pension because it did not tax the pensions of retired state employees. (Much later, the law was changed so that he received his disability pay on top of his retirement pension, rather than as an offset.)

As of 2005:

I can鈥檛 readily determine the state of play a decade later. (The Internet is much more interested in the related issue of how military pensions should be treated in divorce settlements.) Given the growing pro-veteran sentiment and the aforementioned competition for their pensions and skills, I presume that there鈥檚 more disparity now. But lumping in states that have no income taxes for anyone, states who treat military pensions just like other pensions as required by law, and those who treat military pensions more favorably and treating them all as being in the third category is unhelpful to the debate.

James Joyner is editor of the Outside the Beltway blog at http://www.outsidethebeltway.com/.