Already, nearly half of all states don’t tax military pensions at all (this includes the seven states that don’t tax personal income, period), and 20 more states partially exempt them; there are only seven states left with no exemption for veterans. And with nearly 2 million Americans collecting military pensions, the exemptions come at a substantial cost to state coffers: In Maryland, a proposal by Republican Gov. Larry Hogan to exempt the 50,000 military pensions in the state from income taxes would cost the state $34 million in revenue and local governments $22 million, at a time when both are already facing a fiscal crunch.

Proponents of the exemptions cite two different arguments on their behalf—without reckoning with the fact that the two arguments are contradictory.

The first is the emotional argument made on behalf of other preferential policies for veterans, like hiring incentives for employers: We owe special treatment to those who have served the country in uniform and put themselves in harm’s way, especially because so many veterans have difficulty adjusting to civilian life. “This tax cut is the first step, among many to come, to ensuring that the people who spend their lives in service to others are given the support and tax relief they deserve,” said Hogan in announcing his proposal for Maryland.

The second is the economic argument made for other state tax breaks: Veterans are job-creators and productivity engines who will boost the business climate and bottom line of whatever state they live in.