AFP Testimony in Support of Eliminating Tax Burden on Retirement Benefits
Statement of Support for LB 227
Nebraska Legislature Revenue Committee
January 31, 2013
Chairman Hadley and members of the Revenue Committee, my name is B-R-A-D S-T-E-V-E-N-S and I am the Nebraska director of Americans for Prosperity, a free market advocacy group with over 40,000 members statewide.
We support Sen. Kintner’s LB 227 for the simple reason that it will significantly reduce the tax burden on a segment of our state’s population that can least afford it. According to a study produced by the University of Michigan’s Institute for Social Research, the median annual income for a retiree was just under $30,500 while median spending was $1,000 greater than median income for this population. Comparatively, the median income for the 50-plus working population is 57% greater at just over $53,000.
While most retirees are living on limited income; many retirees are at or below the poverty line. It is estimated that 11% of Nebraska’s seniors live below the poverty line, according to the U.S. Census Bureau. Retirees represent a vulnerable population which has a difficult time making ends meet.
Passing LB 227 and eliminating the income tax burden on seniors’ retirement benefits would have a substantive impact. Support for tax relief for Nebraska’s seniors is palpable not only across the state, but in this legislative body. No less than six senators have introduced similar legislation to LB 227 because it is a common sense proposal which will greatly improve the quality of life for Nebraska’s retired population.
According to the Kaiser Foundation Nebraskans spend over $3 billion every year to provide health care services to seniors. We believe seniors can make better decisions on how to spend their income than government can make for them. Allowing seniors to retain 100% of their retirement benefit income will allow families across Nebraska to more readily afford the health care services that will make for happier, healthier lives.
Eliminating the income tax burden on retirement benefits is good public policy that will provide greater economic independence for Nebraska’s seniors. Similar pieces of legislation have been introduced because this is a real problem in Nebraska and must be addressed. LB 227 would create the simplest, most equitable tax structure for all of Nebraska’s seniors and for that reason deserves this committee’s support.