California vs. Veterans: Why Are We the Only State Still Taxing Military Pensions?

This photo was taken from the National Guard team that helped put out the fires in San Francisco.

California is known for many things: its tech innovation, stunning coastlines, and, of course, its infamous housing prices. But there’s another title that doesn’t sit so well, the only state that fully taxes military retirement income. Uh, excuse me?! While all the other states are rolling out the red carpet for veterans, California is just… rolling out the bill.

After a whopping eight attempts to change this backward policy, the state is finally considering tax exemptions for military veterans. Assemblymember James Ramos is throwing his hat back in the ring with a new proposal that would allow veterans to exempt up to $20,000 of their military pensions, if they make under $125,000 a year. Yes, you heard it right, a whole $20,000. Because, you know, the cost of living in California is a steal.

Ramos argues that keeping veterans in California benefits everyone. They aren’t just battlefield heroes; they’re skilled workforce ninjas who could contribute to the economy in various sectors. With about 1.4 million veterans residing in the Golden State, you’d think we’d want to hold onto as many of them as possible. But alas, many of our gallant military folk are heading for greener pastures, literally, they’re fleeing to states that offer better incentives.

Cost of living reigns supreme as the primary reason veterans are packing their bags, often vanishing from California’s landscape faster than a burger at a summer BBQ. And let’s be real: a tax exemption that barely scratches the surface of their income isn’t exactly a show-stopping offer, especially not when states like Texas and Florida are throwing their arms wide open.

The stark reality? California’s military retirement population has plummeted by approximately 28% since 2000. While we’ll miss our veterans, the state can’t expect them to stay put when rent’s as high as a kite. And guess what? If you thought this bill’s passing would set a precedent only for veterans, think again. Experts are already crafting a cautionary tale about how this could lead to other professions demanding similar treatment. Next thing you know, you’ll be watching teachers and firefighters cashing in on tax breaks, too.

But look on the bright side: at least if this bill passes, California won’t be the only state taxing military retirement income. It’s the little victories, right? Maybe our veterans will feel a smidge more appreciated as they contribute to a state teetering on the edge of unaffordable living. Until then, let’s cross our fingers and hope for real change that makes sense, and maybe a little less tax too.

Stay tuned, folks. California’s got veterans to support, and it’s about time we did the right thing.

AUTHOR: tgc

SOURCE: CalMatters