Tax breaks for military retirees aim to stimulate Md.'s economy [Letter]

I'd like to set the record straight regarding your editorial on tax benefits for military retirees ("No to tax breaks for military retirees," Nov. 12).

Unfortunately, your editorial responded to claims of politicians who for the past 12 years have ignored the results of a study mandated by the Maryland General Assembly in 2003. To put it succinctly, the proposal to exempt military retiree pay from state income tax is not based on rewarding retirees for their service, but rather it was developed to provide an economic stimulus for the state.

In 2003, the Maryland Senate passed SB 480, which provided for the establishment of a task force to study the economic benefit of exempting military retired pay from state income tax as an incentive for military retirees to settle in Maryland.

Military personnel retire with a significant set of skills desired by local employers, especially those involved in federal contracts. Career military personnel, unlike other service providers, are transient by nature. Over the course of a 20-year military career, they have moved every two to four years.

As a result, when making a decision as to their retirement locale, the basic consideration is employment. The economic benefit associated with the retirement locale is the next consideration.

In the case of job opportunities in Maryland, its surrounding states offer significant tax incentives for retirees to reside there and commute to employment in Maryland. Thus Maryland loses the tax revenue resulting from the retirees' second-career income, spouse and dependent income, property taxes and sales and use taxes.

The proposal to exempt military retired pay from state income tax is no different than state and local governments offering tax credits to businesses as an incentive to locate within Maryland. It is an incentive to attract retirees recognized by 26 other states.

John W. Fringer

The writer is chairman of the Maryland Retired Veterans Task Force.

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