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Is it fair to have a pension taxed?

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  • Is it fair to have a pension taxed?


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Answer #1 | 11/12 2013 17:01
Yes very much so and can also be possible for some for 50% to 85% of the amounts your social security benefits to become taxable income during each tax year when you do have other sources of worldwide income that you do receive during each tax year. Hope that you find the above enclosed information useful. 12/11/2013
Answer #2 | 11/12 2013 17:02
Pension money is income. And you consume services while you are receiving the income. The services you consume (roads, lights, sewers, police, fire, etc.) have to be paid for somehow. Taxes are the most common way to do that. And since you consume the services you are obligated to pay something for them. The question is really whether the money has been taxed already. And pensions are not. Since they are deferred income you don't pay tax when the pension is accrued. You pay taxes when the pension is paid to you. The fairness part is inherent in that most people make less money on pensions so the tax bite is less than during your normal working life. So the tax burden is much reduced when compared to paying tax on the pension when it's accrued. I hope that helps.
Answer #3 | 11/12 2013 17:02
Yes, everything done in the USA is fair
Answer #4 | 11/12 2013 17:31
Also, if you have a pension where you contributed after tax money, part of the pension is not taxable.
Answer #5 | 11/12 2013 21:36
It is income. Much of it was pretaxed income so the taxes were never paid on it to start with. The idea is that you would be in a lower tax bracket when you retire.
Answer #6 | 11/12 2013 16:57
Absolutely. You get taxed on your wages and the pension is just a form of delayed pay.
Answer #7 | 13/12 2013 08:28
Tax policy is in the eye of the beholder. Tax policy is now a means of how money is spent and to foster certain goals. For example, politicians want us to save for retirement but at the same time spend everything we have to grow the economy so that they can look good. If we get fairness out of the process, it is only a coincidence.
Answer #8 | 12/12 2013 12:53
It is income and income is taxed.

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