Some States Propose to Eliminate Tax Breaks for Seniors

Michigan’s Rick Snyder proposed a business tax decrease. To make up for that revenue loss, he proposes to eliminate the current exemption that seniors get for IRA distributions and pensions. Meanwhile, Georgia and Hawaii are also considering taking away tax exemptions from their retirees. State budgets are under pressure, and some politicians think seniors should carry more of the load.

Raise taxes for seniors in return for a business tax cut? Nearly two-thirds of seniors vote regularly, and they also vote with their feet when choosing a retirement location. Further, AARP will fight to block these proposals and protect its members. Whether any of these modifications will pass is unclear.

See Janet Novack, State Tax Breaks for Seniors on the Chopping Block, Forbes, Mar. 2, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.