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Picard Introduces Income Tax exemption for Young, Seniors

1/28/2015

Sen. Roger A. Picard has introduced legislation aimed at helping Rhode Islanders at economically vulnerable stages of life by providing them a break on state income taxes. The bill (2015-S 0021) would exempt from state income taxes the wages of working Rhode Islanders in the tax years through age 21 and all tax years after the year they turn 62. It would apply only to earned wages, not to pensions, investment income or other income.

Senator Picard (D-Dist. 20, Woonsocket, Cumberland) said he introduced the bill to assist the very young when they are struggling to get by on lower salaries, as well as retired people who find themselves returning to work to make ends meet on limited Social Security and pension income.

“This is one way of giving a little boost to those Rhode Islanders who are typically struggling. Most young people don’t earn very much, particularly if they’re working while going to school. It’ll help young people with economic rites of passage, like buying their first car or setting out on their own. A little break early on will better enable them to get the education they need to earn more when they’re older, which will benefit them as well as the state at that time,” said Senator Picard. “For senior citizens, it can be very difficult to pay the bills when costs are outpacing retirement income. There are lots of people who find themselves working again after they retire to bridge the gap. This tax break is a way to ease their burden a bit as well.”

He added that putting more money into the hands of populations that typically do not have much disposable income can result in more money that is spent locally, so the change could have ripple effects that strengthen Rhode Island’s economy.

The legislation, which has been forwarded to the Senate Finance Committee, is one of several legislative proposals that have been introduced to ease taxes, particularly for retired people.

Senator Picard said this bill, which is cosponsored by Sen. Ryan W. Pearson (D-Dist. 19, Cumberland, Lincoln), is one means of starting the conversation about taxes for vulnerable Rhode Islanders. He said he is looking forward to the discussions this session about all the ways the state can provide tax relief to them.