Missouri will benefit by reducing taxes paid by seniors

It would be a win-win situation for Missouri to discontinue taxing the retirement income of our seniors. For many it may not seem possible, but what is happening is that many are not choosing Missouri for retirement. The reason is that there are a large number of states that are not taxing the retirement incomes and they are drawing people to retire in those states.

An example of that is that someone on a federal retirement, only has to move west of Nevada by 20 miles and the retirement income would not be taxed. In 1992 a study was made in Columbia of how much money the senior population was contributing to the community -- it is more than one might expect. Most likely, the economic impact would be even greater by now.

According to the study each retiree moving into the community brings $250,000 in assets -- that is on the average, some brings more, some brings less. They bring a high level of disposable income. Each retiree is equivalent to the addition of 3.7 manufacturing jobs in the community. Several benefit from the additional income to the community including retailers, utilities, health care, insurance agencies and others.

Each retiree's household will generate one new job in the community. Also, for each retiree who retires in another community or state, it will have the same reverse lost to the community.

There is no doubts that senior citizens have a major economic impact in the community.

The late Wayne Neal, former city manager of Nevada, recognized this and that was one of the reasons he was dedicated to and took the lead in obtaining a new senior center in the community. One of the reasons he viewed it a need was its having an economic impact on the community by enticing senior citizens to stay in the community or move to the community.

Having senior citizens paying state income taxes on their retirement pay encourages them to go to other states. It creates a major economic advantage for the state to do away with these taxes, generally on money where they have been taxed previously, and keeping these people in the state and encouraging others to retire in our great state. With the large proportion of the population in our community over 65, it is important for this community to cater to older people and to recruit them to our community.

Missouri has had an economic reversal in the past two years. There are several reasons for this, but it has been significant. Contributing to this is that the climate for jobs has been reverse, before the state was losing jobs, since it has added jobs. This is only one of the reasons and as a result the state is receiving more funding. This provides alternatives for the government to consider.

National Active and Retired Government Employees have been encouraging the state legislature in recent years to eliminate the state income taxes on all retirees' pension plans, including federal employees, teacher's military veterans and private pensions. This has not been successful. It has been considered that it would cost the state too much. It is difficult to understand that money not paid in taxes is a cost -- it is the tax payers' money. Still, a reduction in taxes is referred to as a cost. In this case it is not a cost -- it is an investment in the economic.

It came as a surprise to me when State Rep. Barney Fisher, 125th District, mentioned during the campaign that the economic climate is better in the state and the governor was going to propose legislature to eliminate income tax on Social Security payments. The so-called "cost" to the state of this proposal now in the legislature will be $100 million to $105 million.

When I first heard the idea, I wondered how many would be affected. Evidently it is far more than I had considered. There are those who are arguing that it will only benefit those with high incomes. The opponents to this proposal, do not get it. With only 14 other states taxing Social Security incomes and two of these considering eliminating the taxes, why would they think that this would only benefit the high incomes?

The people with higher incomes are the retirees' who will retire where there are tax advantages.

As result with the economic impact these citizens make, it is to the advantage to eliminate their taxes and have them retire in Missouri.

Knowing the elimination of taxing the Social Security income was being proposed it was good news to hear Rep. Fisher announce at the December chamber of commerce meeting that he was co-sponsoring a bill to do away on the income taxes paid on retirements.

Danielle Moore, Fulton, is the sponsor of HB133, which NARFE wants to see passed. At present there is $6,000 now exempt from state income tax, but it has an income of $32,000 for joint return and $25,000 for single returns.

This proposed bill will eliminate those income restrictions. If it passes, the most anyone can benefit is $360. No fiscal "cost" has been attached to the bill, but an estimate might be $11 million.

Again this bill will be an economic investment for the state.