Ky. Voices: New tax ideas burden seniors

Commission's Plan lacks balance

January 7, 2013 

Ron Bridges is state director of AARP Kentucky.

  • At issue: Herald-Leader articles and editorials about recent Kentucky tax reform efforts

Gov. Steve Beshear's Blue Ribbon Commission on Tax Reform's plan would mean bad news for Kentucky seniors.

It recommends that seniors bear the burden of the state's fiscal challenges through increased taxes on retirement income. At the same time, the commission also recommends cutting income taxes on Kentuckians in the highest tax brackets and lowering corporate tax rates.

This unbalanced approach will unfairly burden retirees, many of whom have endured significant losses to their retirement savings in the economic recession and simply do not have time or the ability to adjust their retirement savings strategy to make up for those losses.

Unfairly taxing retirement income will take money out of the pockets of Kentucky seniors — money that is needed to cover basic necessities like groceries, prescription drugs and utility bills. The commission expects this tax on retirees to generate $485 million annually.

The blue ribbon commission itself said that "retirees would be negatively impacted" by this proposal and that "taxation of retirement income could impede Kentucky's ability to retain and attract retirees."

The commission's report mentions the possibility of a long-term, structural budget deficit in Kentucky. Yet it proposed a plan that includes hundreds of millions of dollars in tax cuts, most of which are not targeted to people in need.

In its testimony before the commission, AARP Kentucky recommended seeking a fair and balanced approach to improving the adequacy of the tax code.

We recommended the commission take advantage of significant savings available to taxpayers by increasing home- and community-based senior services and decreasing the state's reliance on more costly nursing home care within the Medicaid program.

We will continue to urge the General Assembly to consider other alternatives to addressing the tax code.

The bottom line is this: Balancing the budget on the backs of Kentucky seniors is simply not the answer.

Moving forward, AARP will monitor the situation closely and fight any attempt to unfairly tax retirement income.

We urge Kentuckians to contact their legislators and tell them that raising taxes on seniors is not a solution to the state's budget woes.

Ron Bridges is state director of AARP Kentucky.

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