April 1, 2008

Vos proposal would exempt pensions from income tax

Rep. Robin Vos is trying to pass a bill that would exempt up to $20,000 in pension payments from the state income tax. The proposal would be gradually implemented over 20 years starting in 2009.

A state fiscal estimate estimated the proposal would reduce state revenue between $3.6 million and $6.1 million in 2009, escalating to tens of millions of dollars once the exemption goes into full effect.

The estimate does not give a final estimate on the proposal's impact, but does note that if all pensions were exempt to $20,000 in 2009, it would reduce state revenue by up to $168 million.

Vos' proposal (AB952) has some bipartisan support. Sen. Bob Wirch, D-Kenosha, signed on as a sponsor.

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