State tax reform measures could impact Social Security benefits

Posted May 27, 2013

Sen. Bob Rucho

— The basic premise of reform is to cut the tax rate, then tax more things.

North Carolina is one of 35 states that doesn't tax Social Security benefits. Seniors and advocates have a message for Senate leaders: Please don't start now.

"There are a lot of rumors," said Doug Dickerson, who heads the state branch of the AARP. "Some of the ideas being tossed around are pretty scary if you're a senior."

One idea floating out of the state Senate would apply state tax to Social Security benefits for those who have supplemental income. 

For Dee Hatch of Cary, who is retired, Social Security makes up two-thirds of her retirement income.

"I really count on that Social Security to pay my bills every month," Hatch said. 

She is also concerned about talk of upping taxes on groceries and prescription drugs, which make up most of her bills. 

Dee Hatch Seniors concerned about downsides of tax reform

"I think there are many other places that they could find a way to raise additional revenue," Hatch said. 

Sen. Bob Rucho, R-Mecklenburg, who is leading the state's tax reform movement, stressed that no details have been worked out yet.

"There is no bill yet," he said. "Speculation isn't going to help anybody." 

Still, Dickerson said, many seniors are concerned.

"Adding taxes to older adults in their most vulnerable years is not good public policy," he said.


This blog post is closed for comments.

Oldest First
View all
  • rebelbelle May 30, 2013

    to continue:

    The legislature is talking about reducing the sales tax by less than 1% and adding sales tax on multiple goods and services--including prescription drugs and sevices like lawn care that many seniors cannot do for themselves.

    The drop in state income tax again is peanuts--except for corporations.

    I think we should demand a roll call vote on all tax increases--and vote out the fools who vote for these cruel taxes.

  • rebelbelle May 30, 2013

    Federal pensions are not taxed in NC if you were "vested" (that is, had worked for 5 years) as of August 1989. Ditto state retirement benefits. In both cases, workers paid into the retirement systems.

    What I've noticed is that the legislators have NOT taken themselves out of the state retirement system--even though as "part time employees", they have voted themselves a benefit that other part timers don't get.

    They have continued to collect a "per diem" of $104 per day for EVERY day the legislature is in session--even though they are only "working" four days a week. Also, that per diem is paid even to those who live in Raleigh/Durham/Chapel Hill etc--a lot of people commute to work from those areas every day.

    They voted themselves eligible for health care under the state system for life.

    By the way, I'm told that NO sales taxes are collected on Food Stamp purchases--is this fair?

  • SusanBAnthony9 May 30, 2013

    You spend your whole working life paying high state income taxes, then you retire and they transfer the tax burden to retirees. It's time for us baby boomers to revolt. Enough of this nonsense. P. S. Re: annuities: the only people who benefit form annuities are the people who sell them.

  • lalaloo May 29, 2013

    I believe there's millions more in the state employees retirement funds in N.C. than exist in the entire national SS fund. Tax that.

    Do you have any inkling of an idea where that money comes from "wayneboyd"? The state workers put their OWN MONEY in that account. It comes out of every check and the employee has no choice. When YOU pay some of it, THEN you can have a say on what's done with it.

  • jrfergerson May 29, 2013

    seems our president wants everyone dependent on the government and apply for food stamps

  • changedmyname May 28, 2013

    "Regardless of what happens with Social Security, it's evident that people need to be looking into other conduits of income for their retirement"

    YEP, Mason jars buried in the back yard.

  • sneedm6 May 28, 2013

    Regardless of what happens with Social Security, it's evident that people need to be looking into other conduits of income for their retirement. One often overlooked strategy is the annuity.

    If you've been thinking about an annuity plan, check out http://annuityratesinstantly.com. The website is full of free information and their video library is very educational.

  • whatelseisnew May 28, 2013

    "Its a repub attack on so called entitlements. First they decline to extend unemployment benifits, second they refuse to expand medicaid, third they want to increase the tax on food so get back at Food Stamps, fourth they want tax prescription drugs to gt at medicare and medicaid and now they want the tax SS benifits to slap at government Social Security."

    Unemployment is not an entitlement. It is an insurance program. It never should be extended even a minute let alone go longer than 26 weeks. Expanding Medicaid would have been an act of insanity. Taxing food, I do not agree with, but it does spread the cost of government across more people. People want government to do all this garbage, they ought to be willing to pay for it. Nothing wrong with taxing prescription drugs. taxing SS would just match what the Federal Government is already doing. It will happen, the good news for you is, once the DEMS are back in control they will raise income taxes back up and keep all these other tax

  • whatelseisnew May 28, 2013

    "RE Do state and federal retirees pay state taxes on their retirement money?"

    Some Federal retirees DO NOT pay income tax on their Federal Pensions in North Carolina. It depends on when you started collecting a Federal Pension. Some do. Right now NC does not tax Social Security and it allows a two thousand dollar reduction in the amount people receive from private pensions.

  • whatelseisnew May 28, 2013

    "She is also concerned about talk of upping taxes on groceries and prescription drugs, which make up most of her bills.

    "I think there are many other places that they could find a way to raise additional revenue," Hatch said. "

    Yeah same old attitude; tax somebody else. I don't think they should tax social security, but neither should the Federal Government and they do it.

    "And they call the Demo's tax and spend and now the repubs are tax and cut taxes for the wealthy and corporations who we all know fund their activities, if they dont get re-elected not a problem, they get a job with one of thier big contributors until it all blowes over and run again in a couple of years, no will remember why they weren't re-elected in a couple of years."

    Well this is strange??? These proposals would cut my taxes and I am not rich. The Democrats have NEVER cut my taxes. All they did was raise them and raise them and raise them. Sad to say Obama got into my pocket and I am not rich.