Further Shifting the Tax Burden from Retirees to Young Families Makes Little Sense
Former President Donald Trump recently proposed eliminating taxes on Social Security benefits paid by American seniors. By contrast, his running mate J.D. Vance has emphasized the need to reduce the tax burden on young working families.
In this intra-ticket debate, Vance has it right. In 2021, the 17% of Americans aged 65 and older held 35% of the nation’s assets, received 66% of its entitlement spending, but contributed only 11% of its tax revenue.
Although American seniors typically have lower incomes than young adults, their average net worth is several times higher. They are exempt from payroll taxes, often excluded from property taxes, and generally owe much less in income tax. Nor do they need to set aside funds in case they lose their jobs. The majority of seniors own their homes outright, and they do not incur expenses associated with commuting or living in proximity to employment. Nor must they bear the cost of feeding, housing, clothing, looking after, and educating children, or the costs of repaying student loans. Although seniors receive more than twice as much medical care as working age adults, they pay less for it in premiums and out-of-pocket expenses.
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Chris Pope is a senior fellow at the Manhattan Institute. Follow him on Twitter here. Based on a recent report.
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