California is the only state in the nation that taxes 100% of veterans’ pensions | Opinion

California is renowned for its commitment to social justice and the well-being of its citizens. When it comes to supporting our veterans, however, California is falling behind.

Today, California is the only state in the nation that taxes 100% of veterans’ pensions.

In other words, if you serve your country honorably in uniform for over 20 years, California does not recognize your sacrifice. Instead, the state fully taxes those benefits as income. In these tough economic times, when Californians are getting squeezed by inflation and housing prices, the last group of people we should be making it harder on is veterans.

As a leading progressive state, California should stand up for military families by ending the taxation of these essential benefits now.

I joined the U.S. Air Force in response to 9/11 and was privileged to serve alongside some of the best people I’ve ever known, first as an ammo troop and later as a mission planner. I even met my wife in the military. I also later served both in the State Department and as an adviser in the Office of the Secretary of Defense at the Pentagon. Today, I sit on the board of the charity VetsinTech and have had the honor of founding or serving as an executive at several veteran-lead companies.

I know my fellow military service members make unimaginable sacrifices, endure long periods of separation from loved ones and literally put their lives on the line to safeguard our nation and defend our most cherished values and ideals. In return, we provide our active duty with fewer financial resources than others. The starting salary of a private in the U.S. Army, before benefits, is a mere $23,000. Post-service benefits, like military retirement pensions, are crucial to military families.

Meanwhile, California has the highest number of assigned active-duty military, yet the state ranks near the bottom in terms of retired veterans per capita. By maintaining a policy of taxing veterans’ benefits, we are pushing hardworking, talented service men and women out of state because they cannot afford to live here.

But our veterans are exactly the kind of diverse, dedicated people California should want living, working and raising families here. For example, and contrary to popular belief, women are the fastest growing segment of the military, and Native Americans serve in greater proportion than any other ethnicity.

Many military retirees, often young and highly-skilled, go on to second careers where they will pay taxes on their earnings that are almost guaranteed to exceed that of taxes from their retirement pay. At a time when California needs to be retaining taxpayers, not losing them, this regressive tax costs the state much of its highest-skilled workforce — and therefore millions in state and local taxes.

As we celebrate Veterans Day this year, join me in supporting Assembly Bill 46, which overwhelmingly passed through the State Assembly and state Senate policy committees, but was made a two-year bill by Senate Appropriations. In order for AB 46 to pass in the coming session, it will likely need to be included in next year’s budget. That provides lawmakers and the governor with a historic opportunity to right a wrong that no previous administration fixed.

In the pursuit of fairness and appreciation toward those brave Californians who have selflessly protected our freedoms, it is long overdue for California to reconsider this taxation policy and provide the relief our veterans have earned and deserve by passing AB 46.

This legislation is an opportunity to honor California’s military veterans and families, keep veterans in California and increase economic activity. The bill would exempt military retirement pay and surviving spouse benefits from state personal income tax while strengthening the tax base.

While it’s true California is facing a budget challenge this year, the revenue loss associated with ending the tax on veterans’ pensions is miniscule. A 2018 study further shows that this cost would be more than offset by adding at least $56.3 million in new state and local tax revenues. Furthermore, it would create 12,600 more jobs, add $830 million to total personal income to veterans and increase gross state product by $1.27 billion.

In the spirit of Veterans Day, let’s seize this opportunity to honor our veterans’ service, express our gratitude and affirm California’s commitment to justice and compassion. In doing so, we will create a fairer and more equitable society for those who have given so much in service to our great nation.