Retirement tax questions

I'm getting confused, please bear with me.

So, the way that I'm interpreting this is that:

 All Retired Military Pay would be subject to tax but for the percentage of service-connected VA disability awarded by the VA?

So a retiree drawing military retirement pay who has a 50% service-connected disability would then only be subject to paying taxes on 50% of his retirement pay?  And a 100% service-connected rating would pay no taxes on the same pay?

 

Excuse me if I'm wrong.