The Maryland Public Policy Institute
AUGUST 27, 2010
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Former governor Bob Ehrlich has come out with an idea to exempt the $5000 in veterans’ pensions from state taxes. I’m all about exempting income from taxes, but I’m uncomfortable singling out one group for special treatment over another. Governor Ehrlich should support income tax reform that will lower taxes on all Marylanders, not just veterans.
I understand why Gov. Ehrlich is proposing this tax break for veterans. Those who served our nation in the military deserve good pay and benefits and an adequate retirement. The governor wants to reward the Marylanders who have served in the military and I’m sure he also recognizes the political benefits of helping veterans.
This understandable impulse by Ehrlich doesn’t make his proposal good policy, though. Maryland veterans deserve a tax break, but so do Marylanders who never served in the military. Our state’s taxes are too high. Picking out certain groups for tax breaks is not the way to address this problem, though.
If we head down this road, especially in a state like Maryland, we might not like the consequences. There have been pushes for teachers’ pay to be exempt from taxes, for instance. I’m sure that some people can make arguments as to why teachers do such an important job that they should be exempt from taxes. On the Eastern Shore, where I live, farmers are pretty important. Should they, too, be exempt from taxes? I know some politicians that would probably think this is a great idea.
I’m not belittling the contribution of veterans. They deserve our praise and government pensions. But they don’t deserve a special tax break. If Gov. Ehrlich thinks taxes in Maryland are too high (and they are), let’s lower taxes on everyone.
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