Most people dislike paying taxes. However, in certain cases, tax cuts do not benefit the middle class.
For example, Sen. David Senjem, R-Rochester, has authored a bill that would remove the tax on Social Security benefits in the state. Minnesota is one of 13 states that levee a tax on Social Security income. The Republican argument for eliminating this tax is that elderly individuals from across the United States would flock to Minnesota to enjoy more Social Security benefits.
While this may sound legitimate in theory, there are a few practical problems with this reasoning.
First, according to Karen Conway, an economics professor at the University of New Hampshire, less than 1 percent of people move across the nation to retire. This means that any potential benefits from the tax reduction would be minimal at best.
Also, the 1 percent of seniors who decide to pack their bags do so not to save money, but rather to live closer to family members and in warmer environments.
Finally, in the states that have forgone the tax on Social Security, there has been zero evidence that spending among the elderly has increased. This is compounded by the fact that the primary beneficiaries of this tax cut would be well-off individuals, a group whose money does not “trickle-down” so easily.
While Senjem’s bill sounds good on paper, it would not fulfill its goal of attracting new residents to Minnesota. Therefore, we should keep the Social Security tax.