Tax reform plan's effect on higher-earning pensioners chief among lawmakers' concerns
02/11/2014 06:46 PM
In their first chance to chew on the governor’s tax reform proposal, members of the House budget committee on Tuesday expressed the most concern about a provision to increase taxes on pensioners who bring in more than $80,000.
Lt. Gov. Jerry Abramson, who chaired the 2012 blue ribbon commission on tax reform, presented the details of Gov. Steve Beshear’s tax reform proposal that he first unveiled last week. The chairman of the House Appropriations and Revenue Committee — Rep. Rick Rand, D-Bedford — has filed a shell bill, which legislators can use as a vehicle for a revised proposal later if legislative leaders reach a consensus on which provisions to include.
The committee largely sought clarification from Abramson on the finer points of the bill which he laid out in nearly an hour worth of testimony.
One of the more progressive members of the House and former Blue Ribbon Commission member Rep. Jim Wayne, D-Louisville, told Abramson there were good points in the bill, but there are areas in which he thinks there needs to be more focus:
But several legislators, both Democrat and Republican, told Abramson they’re already receiving calls from retirees worried about losing exemptions on pensions, IRA and other retirement earnings. The proposal would not tax Social Security benefits.
The $41,110 exemption would stay in Beshear’s proposal. But those earning between $80,000 to $100,000 per year would have to pay more in state taxes than what they currently do.
Rep. Jody Richards, D-Bowling Green, told Abramson he thinks the provision could really be “onerous” and “harmful” to retirees who live into their 90’s.
“Ten years from now $80,000 won’t be a lot,” Richards said.
Abramson countered, however, that other states tax retirees more.
After the meeting Rand told reporters that Beshear is already meeting with House and Senate leaders behind closed doors. Beshear has said he’d only ask for a vote on in the House and Senate chambers if an agreement on the bill or changes to the bill can be agreed upon.
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