Migrating seniors won't be stopped by tax policy, research shows

Senate Republicans have introduced a bill to eliminate Minnesota's income tax on Social Security income, which they say would keep seniors from moving away to low-tax states. But research shows that changes to tax code alone don't dictate whether older people stay in the state.

Karen Conway, a professor of Economics at the University of New Hampshire who has studied senior migration, said other Midwestern states that have eliminated taxes on Social Security benefits have not had any measurable change to senior migration.

"We just can find no evidence that these tax breaks have a meaningful effect on elderly migration," Conway said. "We don't see a big uptick in migration. Instead migration has been very steady over time in spite of these changing taxes."

There are a number of reasons why older people move including the appeals of a warmer climate and proximity to family. Conway said less than 1 percent of people over the age of 65 relocate from one state to another each year.

In other states that have eliminated the tax on Social Security benefits, there's been no evidence that the tax cut has paid for itself by increasing senior spending. Conway said the main beneficiary of the cuts has been the more affluent elderly.

Minnesota is one of 13 states that taxes Social Security income; another 38 states do not tax the benefits at all.

Editor's note: The number of states that do not tax Social Security income was listed incorrectly. The story has been updated.

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