In this brief, authors Ben Brewer, Karen Conway, and Jon Rork discuss the findings of their recently published study that investigates, directly, the impact on state economic growth of expanding income tax breaks for seniors. All state income tax systems contain provisions that reduce the state income tax burden for elderly households, and most modest-income elderly households owe little in state income taxes. Each year state legislatures consider expansions to these tax provisions, which tend to benefit primarily upper-income elderly households, with advocates suggesting such changes will be “good” for the state, in part by retaining and attracting elderly residents. Reducing the tax burden for higher-income groups—including the elderly—spurs state economic growth much less than reducing the tax burden for lower-income households. To provide economic relief to low-income elderly households, states would need to enact income-based refundable tax credits similar to the Earned Income Tax Credit available to low-income working households. The authors’ study suggests that expanding such tax credits would likely be more beneficial for economic growth.
Carsey School of Public Policy
National Issue Brief No. 165
Durham, N.H. : Carsey School of Public Policy, University of New Hampshire
Brewer, Ben; Conway, Karen S.; and Rork, Jon, "Are Income Tax Breaks for Seniors Good for State Economic Growth?" (2023). The Carsey School of Public Policy at the Scholars' Repository. 455.
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