This is in response to the letter by James T. Thompson, Retirees complaint ill-founded (Jan. 25).
The data used by (original letter writer Carl A.) Bernacky were from the Office of Personnel Management and the Social Security office. Currently, there are about 20,000 Civil Service Retirement System annuitants in the state of Indiana. A search of the OPM records indicates that from fiscal years 2008 to 2012, the number of civil service annuitants has decreased by 14,235.
Every civil service annuitant contributed 7 percent of their annual earnings into their retirement account. This was taxed at 3.4 percent plus county income tax prior to making the contribution. The 7 percent contribution has been in effect for more than seven decades.
As a federal annuitant, I forfeited two-thirds of my Social Security benefit. When I filed my 2011 Indiana tax return, 85 percent of my Social Security benefit was taxed at the rate mentioned above. Why? Any Social Security benefits received by a civil service annuitant in excess of $2,000 per year eliminate the meager $2,000 Indiana income tax exemption.
I have neighbors who are receiving Social Security benefits who do not pay any Indiana income tax until their income exceeds $32,000. Indiana made this exemption effective in 1984. Civil service annuitants have been penalized (taxed) on their annuity since 1977.
Civil service annuitants are seniors and they are being treated differently.
I am not sure what Mr. Thompsons definition is of a generous salary. I do not consider $35,000.00 a generous salary.
I am a retired letter carrier, and no taxpayers taxes paid my salary.
Civil service annuitants and survivors are a group of seniors being double taxed. Survivors have no $2,000.00 exemption. You must be at least 62 years of age to be eligible for the $2,000.00 exemption. Most civil service annuitants never take advantage of the $2,000.00 exemption. About 4,500 civil service annuitants claim a partial amount of the exemption. House Bill 1294 and Senate Bill 336 would allow a $16,000.00 exemption. We will pay the current applicable tax rates on any amount more than $16,000.00. We want to be granted an exemption equal to the average amount of Social Security benefits received by a retired worker in Indiana. We believe all seniors should be treated fairly under the tax code.
ALLEN LAUER SR.
Second executive vice president
Indiana Federation of NARFE Chapters