Why do pensions get taxed?

Pensions are taxed because they are considered a form of income, similar to wages or salaries. When individuals contribute to pension plans, they often do so with pre-tax dollars, meaning taxes are deferred until the funds are withdrawn during retirement. At that point, the government taxes the withdrawals to generate revenue, reflecting the income earned during the retirement years. This taxation mechanism helps ensure a fair distribution of tax burdens across different income sources.