Bill would make all military pay tax-free

Army Times | March 22, 2007 | Rick Maze

[Kaslin]

Gannett articles can not be posted, so you have to click on the link to read the article

[Almondjoy]

If I said what I meant to say in which it should of read... I "wouldn't"

Would that change your mind?

[Buddy B]

Do you remember when we did not pay taxes on our military pay?
Best I recall none with-held the 1940's or 1950's.

We started to pay into SS in January 1957.

And now I pay taxes on part of my SS.

[Fierce Allegiance]

Bill would make all military pay tax-free,

HELL YEAH! As it should be! They should also get free medical care for life at ANY facility, at NO cost, for life! They should get all get better care than illegals!

[xzins]

Those must be good memories. I wasn't active until 1970, so that era had already passed. Thanks for your service.

[napscoordinator]

I hope this does pass. That would be really nice. Add Retirement pay to it and I will be kissing the floor. lol.

[napscoordinator]

Servicemen and women are citizens of the U.S. as well, with the same obligations as civilians. One of those obligations is to pay taxes.


Darn....even if you are right.....darn!!!!! lol.

[napscoordinator]

An E-2 fresh out of boot camp would make around 17,500 but that is before taxes so he would probably end up with a grand a month. Not a small amount, but that tax free could really help out especially since ten or twenty percent of their pay is going to TSP as well.

[martyjlewis]

If you cruch numbers, pay is not too far off.

Examples (based on Hill AFB, UT, 2007 rates)

New (married) officer w/BS degree:
29,631.60 + 11,710.44 (bah/bas) + 3,279 (tax savings) = 44,621 + 1,859 (extra 2 weeks vacation) + 1,820 (insurance premiums) + 1,000 (co-pays & Rx) = $49,300/yr...reasonable

New (single) airman with a HS diploma:
15,616 + 10,474 + 2933 + 2419 (4 extra weeks vacation) + 1,170 (ins.) + 700 (copays) = $33,312/yr..pretty dang good

These numbers progress relatively decent with rank, but higher ranks/experience levels are generally a bit behind their civilian counterparts.

The BIG difference is in a combat zone, where it really counts.

In a combat zone military personell receive an increase in pay far less than the increase their civilian counterpart would see if they went to the same area. Also, the civilian has the valuable asset of control over when and where they go. The civilian will not likely put up with a year separated from their family (e.g. Korea) right after (or worse, right before) their child is born.

[martyjlewis]

I agree, the AF dorms are hardly worth the full amount of BAH that is withheld, and as I understood it, we supposedly had the best of the branches? The room I had was smaller than the $300 (incl. utilites) studio joints just off base. The chow hall was a decent deal, except that nobody really likes to eat at the same restaurant all the time. Yes, I ate there a bit once I got my BAS, because it was good for the price, even with the surcharge, but I do recall getting quite sick of it as an Airman, when I basically had no choice, unless I wanted to waste my BAS.

On the other hand, you did make more thank 14k as an E-4, because you really should count the tax savings from your BAH/BAS not being taxed, the value of the vacation you got over and above what you would be able to get as a civilian (about two weeks at best most places, three weeks at a few), and your savings in insurance premiums and co-pays, although you might be right to subract a little back for quality of care.

29k is clearly a bit of an over-statement, but to be fair 14k is a bit of an understatement.

[martyjlewis]

I completed a four-year stint in the active reserves last year. I have a good job, so the money from the reserves was just gravy. I spent weekends writing reports at a military base. I'm proud of my service, but I was doing safe duty with minimal stress, and I'm not exactly a candidate for food stamps. Do people like me really need a tax break? I don't think so.

No, you don't, but you're not exactly the military norm. I know far too many people that meet their children for the first time after they have learned to walk, and for only a month in the middle of a year tour in Korea. Meanwhile their wife is left to take care of the family by themselves.

Don't they deserve a break? Many of these honorable people are E-5's or E-6's with 6-10 years experience and an Associates Degree, and choose to re-enlist after this happens. They clearly aren't doing it for the money either. Personally, though, I think a tax break will only serve to separate the Soldiers, Sailors, and Airmen, further from a true feeling of worth, and make their civilian equivalent worth harder to figure out. I say, forget the tax break, give them a raise! Face it, we can't pay the way civilian companies do when they put someone in a dangerous place, so let's pay them more when they are home.

[martyjlewis]

...but that tax free could really help out especially since ten or twenty percent of their pay is going to TSP as well.

TSP really isn't a factor here, as it is optional retirement savings. Should I get a tax break becuase I dump xx% of my pay into a 401-K or IRA?

Well, since I'm under 30, and xx is larger than some IRS determined amount, I do, but so does the young Airman putting the right amount in the TSP.

[NordP]

GREAT IDEA!!!!!! After all they do for us....these people are most deserving. Since we supposedly cannot pay them any more, we could AT LEAST make it non-taxable income.

[Vanbasten]

This is an excellent idea.

[T.Smith]

"...because you really should count the tax savings from your BAH/BAS not being taxed,"

I don't think I understand that part. I never received BAS or BAQ. I don't think I can count as income a nonexistent tax savings on nonexistent income?