One of the top ten tax issues this year for MTA is preventing targeted income tax exemptions for special interest groups. Rather MTA favors exemptions for complete coverage of all people in the broad category. For example, MTA does not favor exemptions for retired State Police, retired Federal employees, retired Coast Guard or military; MTA favors exemptions for all.
When I have mentioned the fact that a bill introduced in the Maryland Senate would exempt retirement or pension income for persons over 65 years of age or disabled persons, including persons with a disabled spouse, most people have no idea that this was introduced. I tell them that they have not read about this because more print media reporters do not know about it either. It is either that or the papers in the State do not want people to know what is going on.
I say to you members of the Senate and the House that the elderly are not among those in Maryland who received an average of 7.25% increase in personal income every year for the last five years as your committee chairs decided was the case when they voted as part of the Spending Affordability Committee on December 14. I say that the elderly and disabled are not going to be among the group that the Spending Affordability Committee decided would receive another 7.25% increase in personal income in the next fiscal year.
MTA applauds the Senators and Delegates who are cosponsors of S.B. 285 and H.B. 465 for recognizing those over 65 or disabled need a tax break. I recognize that others are introducing bills to tweak the way you do this and what it means to be retired, so I am hopeful that a bill will be developed that will pass to assist our elderly and disabled.
However, I would point out that some people have been retired, who have nothing but an Individual Retirement Account from their prior employment. Take employees for the bankrupt Hechinger company, for example. They had no pensions or retirement plan like State of Maryland employees have and nothing like members of the General Assembly have at the present time. When Hechingers went under, these people moved their IRA to another company or were forced to retire. These, too, should be exempt from the Maryland income tax if their IRA is the only source of retirement income.
Other states give a break to the retired. In West Virginia, $8,000 is exempted for those over 65 years of age or totally disabled, but a more limited exemption is given for persons retiring as teachers, public employees and military, probably because these persons retire long before they are 65 years old or disabled. In Delaware, $5,000 is excluded from income for those over 60 years old and only $2,000 if you are under 60 and retired. Several states do not tax retired Federal employees because of their state constitutions or other legal reasons.
It is time for Maryland to recognize that the elderly have contributed all of their lives to provide taxes and when they reach 65 years of age they cannot earn like they could in their younger years. Likewise, the disabled cannot work at any age. Some simple justice and thoughtfulness should be given to helping these people survive in a state with an otherwise staggering cost of living. Maryland does not win prizes for being a good state to retire in and Maryland does not get high recommendations from senior citizen associations for retirement. Around here, Delaware and Pennsylvania are attracting more and more, and Marylanders are moving on.
Speaking for my family, Maryland will need to try harder to keep me from retiring to Florida where three of our four children live with our grandchildren. At age 65 in a few years, I would rather have that 7.5% Maryland Income Tax to do things with my grandchildren, so if Maryland does not acknowledge this, I will be gone with the thousands of others who have already made that decision. We may be getting older, but remember we are also getting wiser. Florida has no income tax.
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