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Should military pensions be exempt from state income tax?

The tax laws here in Georgia currently dictate that residents between the ages of 62 and 64 pay no taxes on the first $35,000 of pensions/retirement income, while those age 65 and up pay no taxes on the first $65,000 of pensions/retirement income.

While these tax-exemption provisions are indeed favorable to older retirees, at least one state lawmaker is now saying that they don't perhaps go far enough, particularly as far as our nation's veterans are concerned.

Rep. Jesse Petrea (R-Savannah) has introduced a bill that would exempt military pensions from the state income tax.

Here, the freshman lawmaker's rationale for the move is that not only do the brave men and women who served in the armed forces deserve such a benefit, but that it would strengthen the economy by encouraging those vets who retire young, but who want to start a second career, to remain here in Georgia

As you may recall, a similar measure was introduced during the last session of the General Assembly, but ultimately failed to gain traction after concerns were raised about the $120 million in tax revenue that would go missing from the state's coffers.

Petrea's measure claims to solve this issue by raising the cigarette tax, already the 48th lowest in the nation, by 28 cents per pack. Indeed, in addition to raising the necessary revenue, he argues that the tax hike would further dissuade young people from picking up the habit.

It remains to be seen how responsive fellow lawmakers will be to this proposal, which will likely be introduced early on in the 2016 session and, if passed, could take effect as early as July 1, 2016. However, given the already favorable tax climates in neighboring states like Florida, Alabama and Tennessee, it's likely they will give it careful consideration.

What are your thoughts on this legislation?

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