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Blunt signs tax cut for Social Security benefits

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(UPI file photo/Bill Greenblatt)
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Blunt

By Matt Sepic, KWMU

St. Louis – Missouri Governor Matt Blunt signed legislation Thursday that eliminates state income taxes on Social Security benefits.

The tax cut begins this year, and will be phased in completely by 2012.

Blunt said taxing Social Security benefits is unfair to senior citizens.

"First-time employees, who are seeing that first chunk go to FICA on their paycheck recognize they're paying lots of money into the system, and a few decades down the road when they retire, that shouldn't be taxable income," Blunt said.

The tax cut will cost the state an estimated $154 million.

Critics, including Tom Kruckemeyer of the Budget Project, say the tax cut will benefit only seniors in the highest tax brackets.

"Somewhere around 72 percent under current or previous law are already exempt," Kruckemeyer said. "So the notion that this is benefiting needy senior citizens is just nonsense."

The legislation also contains a similar tax break for teachers, firefighters, and others who pay into pensions instead of Social Security.

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