The retirement incomes of retired Utah state and local employees should be taxed just as the retirement incomes of ordinary citizens are, says Jack Olson of the Utah Taxpayers Association.
"Utah exempts retirement benefits of 15,000 state and local retirees but not federal or private sector retirees," Olson said."Utah's law was modified last year to take the exemption away from new state and local workers, but about 80,000 state and local employees who are already employed will still have their retirement incomes exempt from state income taxes."
Olson said the U.S. Supreme Court recently ruled that Michigan's income tax on federal retirement benefits violates federal law because Michigan exempts the retirement benefits of state employees from the state income tax, as does Utah.
"The court says Michigan must give the exemption to federal retirees or begin to tax state retirees like everyone else," Olson said.
"The Utah exemption is offensive to taxpayers because nearly all the contributions to the retirement fund are paid by taxpayers, not state employees. The special treatment exemption is also painful to the hundreds of thousands of private-sector workers who have small retirement programs or none at all."