AUGUSTA – Retired teachers and state employees in Maine pay a state income tax on their pensions but one state lawmaker has introduced legislation to change that.
Sen. Shenna Bellows, D-Manchester, said that as it stands, Maine does not tax the social security incomes of retirees but that there is still a state income tax on state pensions.
Retired teachers and state employees said they are being punished just because they draw from a pension instead of Social Security.
“I think it’s only fair that state employees, who do not get Social Security but do get state retirement, should be treated in a similar manner,” said Harold Booth, a retired state employee.
Bellows said that teachers and state employees have worked for lower pay during their careers than they would have earned in the private sector.
“They’re then taking a big hit in their retirement because they’re being taxed on their retirement income in a way that folks in the private sector are not,” she said.
The Taxation Committee heard arguments for and against the bill on Wednesday.