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Trivia Tidbit Of The Day: Part 294 -- Tweaking Policy To Attract & Retain Old Folks.
Ideas & Policies Have Consequences-
We all know the difficulties an aging population presents for a nation, especially a nation with a lavish system of entitlements. But for American states, attracting and retaining those 65 and older is a priority. When you take out the costs of Medicare and Social Security (programs for which the Feds pick up the tab), mature Americans benefit state economies (and state government coffers) far more than they take away from them.
For example, take Florida:
In 2000, mature Floridians brought in more revenue than they cost the state in services, according to the Florida Department of Elder Affairs. Their per-capita income was 25 percent higher than that of adults 18 to 49. In the same year, older Floridians spent $135 billion — $12.5 billion more than younger adults.
Not only that, but older Americans tend to have more accumulated wealth. They can often afford bigger, better homes, on which they will pay more in property taxes. They are good citizens. They don't burden a state's educational system with any of those pesky kids. They travel locally, as tourists in their own communities.
From a state's point of view, when it comes to people over 65 years of age, the more, the merrier. Small towns across the country, many of which have lost substantial proportions of population (especially youthful population) over the past few decades, are hoping that an influx of aging Baby Boomers might breathe new life into their communities.
Thus, while there are certainly downsides to an aging population that we all know by heart, some states are using tax policy to attract and retain older Americans and their cash bonanza:
Interesting that these policies seem to have very real consequences:
Based on trends of the recent and not-so-recent past, we can project that some states will add more elderly folks to their ranks than others. Some states, many (but not all) with wonderfully warm weather, also have policies in place that attract and retain retirees.
And while tax breaks designed to attract retirees, and tax breaks in general, are often criticized by left-wing organizations like the Center on Budget and Policy Priorities (.pdf) for "costing" (actually, they go so far as to use the word "spend") states this number or that number, all these breaks really seem to do is bring in more retirees and their money, boosting tax revenues.
Liberals never seem to grasp that. A healthy and robust economy with active commerce is the best way to raise tax revenues. The best way to have a healthy and robust economy with active commerce is to get the heck out of the way and let individuals and businesses do what they do. Tax relief should never, ever, be considered a cost the government pays, especially when that tax relief actually boosts tax collections.
Ideally, though, a state should offer low taxes across the board to attract young and old alike, rather than raising taxes on retirees to make things "fair" and get back all that money the state is "spending" on tax breaks.
Previous Trivia Tidbit: Give Bush Some Danged Credit, Already, On Limiting Burdensome Regulations.
Posted by Will Franklin · 12 March 2006 05:01 PM
Considering that people are literally fleeing the blue states for the red states when they retire and bringing either pensions from the blue state public service jobs they held or SS and other pension money and moving to the Red STates, it is a huge boon for Texas, Arizona, and Florida. Our tax rates encourage them to retire here with our low income taxes and low property tax rates.
As more transit workers in NY, NJ, Penn, MA, etc., retire and move here, they bring checks from tax payers in these states into our neck. It is similar to Mexican workers sending their paychecks home or moving back home at the end of the year. It is a huge net gain for us.
But does that make it a good thing for the country? When entitlements make up over 50% of government spending and the Blue states are transferring money to the Red states, it is going to create major issues. It is also going to force them to further raise state taxes to pay for the money leaving the system and that will drive more people out.
Posted by: Justin B at March 14, 2006 05:48 PM