Old People and Money

The Missouri Legislature recently passed a bill freezing real estate taxes at their current level for seniors on Social Security. 

 The problem with exempting seniors from increases in taxes is that it hurts the political subdivisions which receive them and puts younger people on the hook to pay even more taxes.

I realize that many older people on fixed incomes don’t have a nest egg and live on Social Security and pensions month to month.  On the other hand, according to the Pew Research Center, Americans 65 and older are forty-seven times richer than those 35 and younger.  It makes sense that older people would have more money than young people, because they have been working and saving longer.  But this wealth gap is massive by historical standards.

Furthermore, real estate values are going up.

The solution to not only protect senior citizens against rising taxes, but temporarily exempt them without creating a complicated set of regulations and a new sub-bureaucracy is to allow people over 62 to either pay their taxes when due or let them accrue all real estate taxes as a lien against their property, payable at a reasonable rate of interest (5%), or payable when they die, refinance or sell.

While this would make for a short-term loss of cash for the governments, once people started dying or selling, the delayed cash would start rolling in and many of us would pay currently.  

Alternatively, governments could issue bonds secured by these deferred taxes, which would be scooped up by investors.

Problem solved.