There’s a new plan at the Wisconsin Capitol to try and keep more retirees in the state.
State Rep. David Steffen, R-Howard, and state Sen. Rachael Cabral Guevara, R-Appleton, on Monday introduced legislation that would exempt the first $100,000 of retirement income for people 67 or older, and the first $150,000 for married couples.
“When our residents reach retirement age, they are faced with the impossible decision – do I stay in my home state with all the relationships and connections I’ve spent a lifetime building, or do I relocate to another state where I can afford to live out the retirement I’ve worked so hard for?,” Steffen said. “They shouldn’t have to choose. The bottom line is, we know the value our retirees bring to our families, communities and economy.”
Many states don’t tax retirement income in one shape or form.
Wisconsin currently doesn’t tax Social Security and military earnings for retirees, but the new proposal would go further.
“Retirement income and savings is something that impacts folks for years after they retire. This is then reflected by how much people spend at restaurants, on housing, and in their community,” Cabral-Guevara said. “By keeping these retirees in Wisconsin, we will see an economic benefit. As I’ve said in the past, I trust hardworking Wisconsinites to spend their money more wisely than the government.”
Two of Wisconsin’s neighbors, Illinois and Iowa explicitly do not tax retirement income such as IRAs, 401(k) plans or pensions.
Wisconsin’s Legislative Fiscal Bureau figures that Steffen’s and Cabral Guevara’s new exemptions would almost entirely eliminate the income tax burden for retirees here in Wisconsin.
The legislation is out for co-sponsorship currently, Steffen and Cabral Guevara say it will likely get a hearing later this fall.
