[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
           LIMITING STATE TAXATION OF CERTAIN PENSION INCOME

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                               speech of

                              HON. JON KYL

                               of arizona

                    in the house of representatives

                        Monday, October 3, 1994

  Mr. KYL. Mr. Speaker, I rise in support of H.R. 546, which will go a 
long way toward resolving the problem of so-called source taxes.
  Mr. Speaker, in recent years, some State governments, desperate for 
new sources of revenue, have increasingly turned to former residents to 
supplement their coffers. After all, nonresidents are easy targets: 
they no longer have a say or a vote in how tax dollars are spent by 
those States. Moreover, since they don't require any additional 
services, like police protection, new roads or the like, the taxes they 
pay represent a pure windfall.
  Source taxes may be a boon to some States, but they are inherently 
unfair to retirees who worked long and hard for their retirement 
benefits. People should not be penalized simply because they choose to 
retire to different parts of the country, whether to be with friends or 
family, to enjoy a better climate, or just to explore new parts of the 
country.
  Retirees can find themselves double-taxed, once by the State in which 
they currently reside and again by the source-taxing State, unless 
their home State allows a deduction for amounts paid to other States. 
But, even if they are allowed a deduction, there is still a problem. 
Source-taxing States are denying other States revenues to which they 
are rightly entitled, revenues needed to provide services for their own 
residents, including source-taxed retirees.
  Last year, I cosponsored a bill, H.R. 702, with Representative 
Barbara Vucanovich of Nevada, to repeal source taxes outright. While I 
still prefer that measure, the version before us today represents a 
compromise that largely resolves the problem.
  As amended by the Judiciary Committee, H.R. 546 exempts the first 
$30,000 of annual retirement income from the source tax. That will 
provide relief to an estimated 85 to 90 percent of all those subject to 
the tax. Moreover, the $30,000 threshold will be indexed so that 
inflation does not ultimately push more retirees back under the source 
tax.
  Mr. Speaker, I urge my colleagues to support this legislation.

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