Assemblymember Ramos’ AB 46 is a bill to exempt military retirees and surviving spouses from California income tax. Military retirees have years of experience in science, technical, engineering, mathematics (STEM), and medical occupations. An income tax exclusion would incentivize military retirees to remain in California, providing the state with an available workforce to fill many of the almost 40,000 technical and over 20,000 medical field job postings. These job postings include all levels of software engineering, cybersecurity, aerospace, systems engineering, artificial intelligence, biochemistry, physicians, nurses, and management. It is anticipated that this workforce will grow by 2% per year. Many military retirees, surviving spouses, and their children will use their government educational benefits to pursue advanced degrees in STEM and medical occupations, providing a much-needed workforce in California.

According to the Defense Manpower Data Center, military personnel are projected to enter the civilian workforce in these STEM and medical occupations.
After 20 years of military service, service members are eligible for retirement, many in their 40s. Military retirees are highly skilled, with experience in management, task prioritization, resource management, attention to detail, team building, and communications. Most importantly, many military retirees have security clearances required to work in California’s expanding national security workforce.

Military retirees pay taxes on their second career earnings, usually greater than their taxable active duty pay. Instead of losing a taxpayer and family, California would retain a taxpayer with increased earnings and the military retirees’ family tax revenues.

A state income tax exemption for military retirees and surviving spouses would not only retain and attract these highly skilled workers but also exhibit California’s appreciation for their years of service safeguarding our nation.

California is in a unique position in that it can honor our military retirees while simultaneously enhancing its STEM and medical workforce and bolstering its tax base with higher-earning military retirees and surviving spouses.