Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 3, 1994 TAG: 9402030281
SECTION: EDITORIAL PAGE: A8 EDITION: METRO
SOURCE: CHARLES L. FALLIS
DATELINE: LENGTH: Medium
A response is necessary to refute the myths you may have passed on to your readers with regard to the issue of state income-tax refunds owed federal and civilian military retirees for illegally collected taxes. One would gather from reading your editorial that it's become a dishonorable practice to pay one's debts!
On June 18, 1993 the U.S. Supreme Court in Harper vs. Virginia Department of Taxation rejected all previous Virginia court judgments in this case when it ruled that its own earlier decision for retirees is to be applied retroactively and that Virginia must now seriously address the issue of state tax refunds. The retirees' attorney in this suit states that he fully expects federal retirees to obtain relief through the judicial process, and this latest court decision puts them much closer to ultimately getting the refunds to which they're entitled. Even Justice Sandra Day O'Connor, in her dissenting opinion, made it clear she believes the state will not be able to avoid the payment of refunds. The court left to the state only the issue of determining how refunds shall be paid. Not unexpectedly, the most recent Virginia Circuit Court decision asserting that the state doesn't owe refunds is, for the third time, in conflict with the higher court's order and therefore will be appealed.
Despite several U.S. Supreme Court decisions handed down in this and other related cases (all favorable to federal retirees), many state politicians, bureaucrats and media representatives, based upon what they perceive as technical escape language contained in the Harper decision, are boasting that the state may yet be spared the pain of providing relief to its income-tax victims. Responsible officials and others, including Gov. George Allen and members of his administration who've argued that the state should now honestly and straightforwardly acknowledge its obligation to federal retirees, have been in the minority until now. And they've been subjected to scorn and criticism by both political opponents and media antagonists.
Through political efforts and legal action, the Virginia Federation of Chapters of the National Association of Retired Federal Employees has been in the vanguard of those striving to gain redress for the victims of tax discrimination by the state of Virginia. To this day, the state continues in the unfair application of its tax laws. While state retirees are taxed equally with federal retirees, the state, through the payment of additional health-care premiums and outright cash refunds, returns all taxes collected from its state retirees.
Your baseless assertion that this case is precariously balanced upon the U.S. Supreme Court's erroneous and technical interpretation of a 50-year-old Congressional statute, which state courts have wisely interpreted differently, is ludicrous. Any first-year law student would know that your analysis of the situation is an exercise in faulty judgment. How many instances can you cite in which state court decisions have prevailed against the highest court in the land? Of the 22 states, which prior to Harper were in violation of this so-called erroneous interpretation, 14 have now recognized their liability under the law and have either undertaken or completed action to make refunds.
You're correct that Allen, in his campaign for governor, expressed his belief that Virginia had lost the tax-refund court case and therefore should set about making restitution of the illegally collected taxes. However, your characterization of his overtures to tax victims as ``kowtowing'' and ``pandering'' reflects either shallow partisanship on your part or an apparent mean-spiritedness toward Virginia's senior citizens. All of those citizens benefited from NARFE's hard work in the passage of Virginia's current tax laws that provide limited tax credits for the elderly, irrespective of their current status or former employment.
Finally, your effort to justify the pre-litigation Virginia tax law, which for 47 years illegally taxed federal retirees while exempting state retirees, provides, albeit inappropriately, a certain comic relief to an otherwise serious situation. How can anyone with reasonable intelligence believe that a state's tax on state retirees is, in essence, a tax on itself and therefore to be avoided? Would that all governments adopt this progressive and innovative approach to taxation! April 15 would undoubtedly become a national holiday celebrated by all ecstatic municipal, county, state and federal government retirees. And, of course, we could leave it to your creative editorial writers to explain to all those other harried taxpayers how the consequences are so wonderfully beneficial to them.
Charles L. Fallis is second vice president of the Virginia Federation of Chapters of the National Association of Retired Federal Employees in Salem.
by CNB