Show Tax Proposals For Veteran Service Connected Injury Compensation Now Being Considered Congressman G G. V. V Sonny Montgomery MS D-MS Chairman of the House Committee on Veterans' Veterans Affairs is expressing considerable misgivings over reports that the Reagan Administration is planning to require veterans who receive compensation for service-connected service injuries to pay federal income tax on those benefits In a letter to the President Montgomery said that these benefits have from their inception been exempted from taxation and I cannot imagine any justification that would warrant a departure from this longstanding longstanding longstanding long long- standing policy Montgomery has tentatively scheduled a hearing of the full committee on February 20 to hear from the Administrator of Veterans' Veterans Affairs on the VA budget In his letter to the White House he states that in view of the adverse impact the taxing of compensation would have on service-connected service disabled veterans we must hear Treasury Secretary Regan's justification for his recommendations to you and I will insist that he or his spokesman appear before the Committee on that date to present the Administrations Administration's views and to answer questions relating to the proposal Montgomery said that the difference between compensation rates and the average salary of wage earners today already reflects the tax-exempt tax status of those who receive the benefits Disabled veterans earn less than the average worker because of their physical handicaps said Montgomery If compensation were to be taxed it would take higher rates to replace the lost income and this could wind up costing as much or more than would be gained by taxing the benefit The tax proposal comes amid what Montgomery calls a flurry of proposed changes in VA benefits now being considered by the Administration including the possible elimination of of living adjustments adjustments adjustments adjust adjust- ments and the exclusion of many non- non service-connected service veterans from the VA health care system I am greatly concerned as are all veterans that such a proposal is being seriously considered said Montgomery These individuals earned their benefits by serving honorably in our military and by suffering disabilities connected to that service It would be unjust to ask them to give up any portion of their current benefits benefi tc |