Professor Constantine Katsoris wrote an op-ed for The Hill on how state and local taxes are unfairly impacting seniors and what changes need to be made in order to assist the elderly during their declining years.
Politicians frequently boast in headlines and on cable news about their efforts at tax reform, but too often we short change our seniors at the expense of funding varying pet projects of our representatives. The Tax Cuts and Jobs Act, for example, raised the standard deduction with great fanfare, however, it was accompanied by placing a cap of $10,000 on the itemized deductibility of state and local taxes. For the seniors who have worked their entire lives and reside in a high tax state like New York, New Jersey, Connecticut, or California, that limit includes city income taxes, local real estate taxes, state income taxes, and federal income taxes.
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What can be done to alleviate this financial anxiety facing seniors? For starters, the $10,000 cap on the deductibility of state and local taxes should be eliminated entirely for seniors so they do not have to choose between leaving their homes and families for the sake of moving to a low or no tax state in a far away and strange jurisdiction in order to preserve their spendable income in their declining years. The medical expenses deduction threshold of 10 percent should also be eliminated entirely for seniors who contemporaneously experience falling income at the time of rising but essential health costs. In many instances, this can make all the difference for seniors in having to choose between food and medicine.