BY REP. BARBARA MARUMOTO – Ding Dong the pension tax is dead. SB 570 passed the House today minus the provision that taxed pensions.
True it would have only affected high-income earners (above $100,000 for individual filers), but we were all afraid that the income level would slide downward when the State needed more money. If the AGI went down to $37,500 it would indeed have been a cruel tax.
All during this session I received a steady stream of letters, phone calls and e mails. I was stopped several times in neighborhood markets and shopping centers.
None of the communications were form letters, but individual pleas reminding me that retirees could not afford to lose more income to taxes. There were several that reminded me that the Governor and legislators should keep their hands off of our pensions. Many were incensed that they had worked for decades with the expectation that their pension would be tax-free and felt that the rug was now being pulled out from under them.
Other legislators must have received similar communications that amounted to a focused message. Though they were not a big powerful lobby, their sincere cards, letters and admonitions did the trick – it killed the pension tax. Congratulations to these senior citizens and AARP. Retirees have won the day.
Barbara Marumoto is a Republican representing Kaimuki and Kahala in the Hawaii House of Representatives.
I hope that this went down for more reasons than those mentioned here. This tax was simply bad policy and the results of similar taxes (some long existing) on the mainland is instructive. Many folks who would be subject to such taxes simply leave — and even more never come. Yet these folks bring their money (including federal entitlements like Social Security and Medicare) to our state, usually don’t have kids to educate, and don’t require lots of state or city services. Yet they contribute mightily as volunteers, in the arts, as part-time workers and as, well, simply kapuna. So, even though there was a groundswell against these taxes, I hope at least a few of our legislators learned that all taxes have problematical consequences, some more than others. Taxing pensions is one of the latter. Indeed, if one looks at the York, PA area, one will see that many if not most of those who live there are retirees from nearby Maryland — a state that’s in serious financial straits resulting from over-spending and that has chased-out most of its least costly citizens to PA or Florida for decades.
But the state badly needs to cut spending and become both more effective and more efficient at what’s left. Unfortunately we have a Governor who looks at this year’s refusal to over-spend even more as a setback to his collectivist agenda.
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