David Brunori at Tax.com notes that Maine's Governor proposes exempting all pension income from state income tax:
He says that he wants to prevent retirees from moving to Florida and Nevada. He also wants to alleviate the burden on senior citizens. But there is no evidence that anyone leaves Maine for Florida – and certainly not Nevada – for tax reasons. And some retirees earning a pension do not need the tax break. What LePage's proposal will do is narrow the tax base and force higher burdens on everyone else. I love old folks as much as the next guy. But I would not want to pay taxes for them.
As we've pointed out, being old is a poor proxy for being poor. Many old folks have paid-for houses and savings. There are certainly poor old people. They should be helped because they are poor. The self-sufficient elderly shouldn't get a break on the back of, say, struggling young families.
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