Social Security benefits should not be seen as taxable income
The Bluefield Daily Telegraph on a tax on Social Security income:
Republican and Democratic lawmakers in West Virginia may have finally found something they can agree on.
West Virginia is one of only 13 states that tax a portion of Social Security income, and that’s a practice local lawmakers would like to end.
Delegate Ed Evans, a Democrat whose legislative district includes much of McDowell County and parts of Mercer County, is leading the charge to help retirees who are burdened by the tax on Social Security income.
“While I was on the campaign trail that was one of the things I heard we need to do for our retirees,” Evans said, adding that retirees see few cost of living (COLA) raises.
“This would be an instant COLA. We need to take care of those now retired.”
Evans said a lot of residents in the state are retired and on fixed incomes. This includes many of his constituents in McDowell and Mercer counties. Many Republicans appear to be in agreement with Evans about the need to eliminate the tax on Social Security income.
Delegate John Shott, R-Mercer, said eliminating the tax has been on the agenda for some time, but the budget has in the past been too tight to do away with the tax, which brings in about $21 million a year in revenue to the state.
Shott said he may be more in favor of phasing in the elimination rather than in “one fell swoop.”
“A lot depends on what our budget is,” Shott said of the projected revenue for the state. “We are doing well so far but that could change.”
Senator Chandler Swope, R-6th District, says it’s a matter of eliminating as many taxes as possible when new revenue is coming in to replace it as a way to promote the state as a place to move to and do business in. He points out that none of West Virginia’s contiguous states taxes Social Security benefits.
According to Mark Muchow, Deputy Cabinet Secretary for the state Department of Revenue, West Virginia has a high percentage of residents who are retired. He says in 2016, total Social Security benefit payments (not including Supplemental Security Income benefits or SSI) to West Virginia residents totaled nearly $7 billion, or more than 10.3 percent of total state personal income. The formula for how much of that income is taxed in the state depends on the amount taxed by the federal government, he said, which could be up to 50 percent or as high as 85 percent, depending on a person’s other income.
Legislators convene in Charleston on Jan. 9 to start the 2019 legislative session. If they are looking for an area of bipartisan agreement, eliminating — or at least phasing out the state tax on Social Security income over a period of time — could be a good starting point.
Doing so would help retirees across our region, who could use the extra income to help meet other expenses each month.