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After reporting on new tax relief for retirees in Wisconsin’s state budget, we asked readers for their thoughts on the policy.
Within three days, nearly 60 of you wrote in about how the exemption — up to $24,000 in retirement income for those over 67 — would affect you. Overall, feelings were mixed — even some who will benefit from the cuts worried about the impact on younger adults or funding for government services.
Just over half of respondents supported the retirement tax cut, submitting responses like “great idea and welcomed relief” or “way overdue.” About 16 readers were mostly against it, giving answers like “it’s a gimmick” or “pandering to old people.”
Another nine respondents had mixed feelings. “I like it, but I don’t need it, and I don’t want to harm others just for a tax break,” said Jim, a 68-year-old from the Lake Wissota area.
Here are the main themes from your responses:
Will help finances, could impact moving decisions
Many welcomed the change and noted they have paid taxes for decades. Some said it could affect where they choose to live.
➤ “Love them. It’s about time retirees got a break. We’ve been paying taxes for 40+ years. We will save some money and won’t change residency to Arizona.” Brad, 69, Delafield
➤ “I’m near retirement and was considering moving closer to my kids in Illinois. Prior to passage, Illinois was higher in property taxes but did not tax pension, so it was a wash. The new tax break will favor Wisconsin residency so I may now decide to stay north of the border.” Charlie, 59
➤ “It has been a long time coming. It may not keep Wisconsin residents from moving to a tax-free state income tax state, but it would make that decision more difficult. Those states do have downsides, with higher insurance rates and higher vehicle registration fees to name a few.” Paul, 78, Franklin, has winter home in Las Vegas
➤ “My wife is 67 and, at our present tax rate, it will save us about $850/year (not huge but every little bit helps).” Dan, 64, Shawano
➤ “Good move, but don’t know why you have to be 67 when many people are retired and on a fixed income prior to that.” Bob, 66, Dousman
➤ “It doesn’t go far enough! We already paid state income tax while working … we pay again in retirement … that’s wrong! Live in Illinois and you pay NO TAX in retirement!” Kim, 67, Kenosha
Concerns about burdens on younger people
Some respondents worried about the long-term effects on state finances and younger generations.
➤ “I think it is a bad idea. This just shifts the burden to young struggling people trying to make it. This is an unfair burden for younger people and families.” Joanne, 82, Madison
➤ “It’s a bad idea, shifting more of the tax burden to young people. Though there are seniors who need help, as a demographic group, seniors are wealthier than all other groups. This is bad social policy.” Dennis, 71, Wauwatosa
➤ “It depends on what we need to live a decent life. If the tax break means cuts to education, health care and environment, it is plain stupid.” Hanna, 80, Cleveland
➤ “Being 78 years, I always like more money. But shifting the burden to the younger generations is a poor choice. I believe that the burden should rest mainly on the wealthy and (ultra) wealthy. Those that control more than 90% of the wealth should pay more than 90% of the taxes.” Bob, 78, Hazelhurst
➤ “I like that it is not a total retirement income tax break. Thus, those with higher retirement income (like me and my wife) still have to pay some, while many who still do pay taxes on retirement income will get a full break. I believe those with higher incomes should pay more in taxes — even though it (includes) me.” John, 67, Milwaukee
➤ “After 74 years living in Wisconsin, my wife and I moved to Hendersonville, Tennessee. Tennessee does not have a state income tax, but that is not the reason for our move. We moved solely to be near grandkids. … Tennessee has a very high sales tax, almost 10%. Tennessee politicians sell the sales tax by saying that visitors will help pay for the needed services. While this is true, two other groups shoulder the biggest share of this burden, families and the poor. In order for me to pay no state tax, families pay extra for food, diapers, clothes and other necessities. The same is true for the poor. So do I feel good about freedom from state taxes? The answer is definitely NO.” Thomas, Tennessee
Seen as political pandering to sway voters
Some respondents saw the policy as a political move. This year’s state budget was considered a compromise, and tax cuts were among the wins for Republicans.
➤ “The best the GOP Assembly can come up with to keep their reliable voters happy.” Tim, 70, Whitefish Bay
➤ “It’s just Republican pandering. I, along with most Social Security recipients, pay nothing or very little in state taxes anyway.” Gary, 74, Wausau
➤ “This is a political ploy that was thought through, leading to higher deficits. People should concede that certain things are worth paying for!” Bruce, 73
➤ “It is about time, but really surprised (Gov. Tony) Evers signed off on the bill,” Paul, 72, Neenah
Climate, family among top reasons for moving
We also asked about the biggest factors readers consider when deciding where to retire. Lawmakers have long discussed how to keep Wisconsin attractive compared to other states with lower income taxes, like Illinois.
Weather and being close to family were the leading responses, but respondents also cited the overall cost of living and tax burdens.
➤ “Proximity to children and grandchildren, ready access to quality medical care, easy access to air transportation.” Stuart, 68, Allouez
➤ “Proximity to family and weather. I spend winters in Arizona and the rest of the year in Wisconsin.” Linda, 68, Wausau
➤ “The natural environment — we didn’t want somewhere that gets too hot and didn’t want somewhere where water issues will become a problem.” Jill, 67, Brule
➤ “The tax burden on my retirement accounts. As things stand now, I am projecting that I will pay WI $6000 in income tax compared to states that do not tax that income (FL, NV, TN, and many more),” Joe, 60, Whitefish Bay
➤ “We get to keep more of what we receive. I was thinking of moving to Florida again just to save,” Gladys, 74, Pleasant Prairie