Untitled Document

News Release
Congressman Bob Etheridge
North Carolina

October 28, 2003

Contact: Sara Lang
Phone: (202) 225-4531

Etheridge Calls for End to Unfair Tax on North Carolina's Veterans

RALEIGH - With Veterans Day fast approaching, U.S. Rep. Bob Etheridge (D-Lillington) today released a new report showing the wide-reaching impact of the Disabled Veterans Tax on North Carolina's veterans. Etheridge called for an immediate end to the century-old tax, which reduces, dollar for dollar, retirement benefits to military retired, disabled veterans by the amount of their disability payments.

"According to this new report, nearly 26,000 veterans in North Carolina lose more than $150 million in benefits each year due to the Disabled Veterans Tax," Etheridge said. "That's real money. The legislation I support would put, on average, an extra $500 each month into the pockets of affected veterans. We can never fully repay these veterans for their service to our country, but we ought to give them their due. Congress ought to end the Disabled Veterans Tax for all disabled military retirees immediately. They should not have to wait another day for the respect and honor of a grateful nation."

Current law prohibits more than 560,000 retired, disabled veterans from receiving both their full military retirement pay and disability compensation. Instead, their retirement payments are reduced by the amount of money they receive in disability, essentially taxing their disability at a rate of 100 percent.

According to the report by the Committee on Government Reform released today by Etheridge and Reps. David Price and Brad Miller, an estimated one out of every three retired veterans in the state is subject to the Disabled Veterans Tax. In the 2nd District alone, more than 3,000 retired veterans lose their benefits because of the tax. Impacted veterans in North Carolina lose an average of nearly $6,000 each year. Click here to read the full report.

H.R. 303, a bill ending the Disabled Veterans Tax, is supported by more than 370 Members of Congress including Etheridge, but Republican leaders have refused to bring it to a vote. The House Republican Leadership recently announced their support for a "compromise" that would end the tax for veterans who are more than 50 percent disabled according to the Department of Veterans Affairs. This proposal neglects more than two-thirds of veterans affected by the tax, and it would take a full decade to phase in benefits for those who qualify.

John Youmans, a disabled veteran and military retiree from Lillington voiced his frustration with the compromise. "The latest Concurrent Receipt compromise by GOP Leadership, made behind closed doors, is totally inadequate and a slap in the face to veterans. It only overturns this discriminatory law for less than half of the disabled veterans and requires a 10 year phase-in. Many veterans have already waited 25 or 30 years to get this law changed and they will be in their graves long before they ever receive their due pay. With 371 cosponsors, this bill should have been passed long ago."