This morning's newspaper talks about the Governor's budget for the coming year. There has been a lot of talk recently about the exemption that seniors enjoy on the state income tax. Well, I know what I will do if that changes.
When I was Treasurer, I spoke with a woman about her property taxes and I asked her why her house was shown as a non-homestead, meaning she was a non-resident. She said it was financially beneficial for her and her husband to be Florida residents, rather than Michigan residents.
I have an article from Forbes.com that I saved on my computer regarding states that are advantageous to seniors. Here is an excerpt:
... even as they slapped a new tax on hospitals, raised dozens of user fees and eliminated a low-income tax credit, Georgia legislators passed income tax relief for one group: well-off retirees. For residents 62 or older, Georgia already exempts from its 6% tax all Social Security and $70,000 per couple of income from pensions, retirement accounts, annuities, interest, dividends, capital gains and rents. But in 2012 the exemption for couples 65 and older will rise to $130,000, and by 2016 all their retirement income will be exempt--a break Governor Sonny Perdue championed as a lure for well-heeled seniors.
If you're looking for a domestic retirement tax haven, Georgia is hardly the only place worth considering. Seven states--Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming--don't tax personal income at all. New Hampshire and Tennessee tax interest and dividends but not other income. The rest of the states have broad income taxes but give old taxpayers breaks, some quite generous.
Michigan already taxes IRA withdrawals, while some other states do not.
If I moved to Texas where my oldest son lives, I would not have to deal with snow on a daily basis in winter. And I could visit my other sons up here during the heat of July and August down there.
So, let's think about this. All of our young, professional folks are leaving for other states. Our seniors who have a comfortable income are leaving for other states. What does that leave here in Michigan? Do we become the welfare state for those who have no place else to go?
As they say, it's all about the money.
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