By
FPI Staff
|
April 17, 2018

New Federal Tax Law Reduces Revenue While Population Ages, According to Recent Report

New Federal Tax Law Reduces Revenue While Population Ages, According to Recent Report

Florida’s high percentage of both households with one or more elderly people and seniors living below the poverty line requires full investment in health care programs and services

LAKE MARY, FL – The share of people age 65 and older in the U.S. will grow from 15 to 21 percent over the next two decades, which will drive the need for spending on programs like Social Security, Medicare and Medicaid, according to the non-partisan Center on Budget and Policy Priorities (CBPP). The CBPP policy brief, New Tax Law Shrinks Revenue When More Revenue Is Needed, also notes a Joint Committee on Taxation estimate that the Tax Cuts and Jobs Act will cost roughly $1.1 trillion over the next 10 years, when accounting for any additional economic growth in that same period.

“The projected shrink in revenue coupled with the increasing share of older Americans is particularly concerning in a state like Florida, which has a high percentage of senior residents,” said Joseph F. Pennisi, executive director of the Florida Policy Institute (FPI). “A drop in federal revenue means less investment in those vital programs and services that seniors rely on.”

According to U.S. Census Bureau data, Florida has the largest share of households in the nation (35.9 percent) with one or more people 65 years and older. Additionally, 10.4 percent of Florida seniors are living below the federal poverty level, which is worse than the national average (9.2 percent).

In its policy brief, CBPP states that both public and private sector health care expenditures have “grown faster than the economy and will likely continue to do so, in part due to new procedures, drugs, and treatments that improve health and save lives but also add to costs.”

Florida already falls short in providing long-term care and supports (LTSS), according to a recent AARP scorecard. The state ranks 46th in the nation for LTSS, which includes both nursing home care and home- and community-based services intended to prevent or delay nursing home care.

To make matters worse, Florida could also see revenue losses at the state level, according to FPI. The state is considering a constitutional amendment that would require a supermajority vote of the state Legislature, or a two-thirds vote in each chamber, to increase a state tax or fee, institute a new state tax or fee or eliminate an exemption or credit. A state with a similar supermajority requirement, Oklahoma, saw deep cuts to public services over the past decade.

“Lawmakers on the state and federal level must be looking for long-term solutions to caring for elderly residents, including investing in safety net programs,” added Pennisi. “And to do that requires revenue.”

The Florida Policy Institute is an independent, nonpartisan and nonprofit organization dedicated to promoting widespread prosperity through timely, thoughtful and objective analysis of state policy issues affecting economic opportunity.

Downloadable Resources

There are no attachments currently.
Related posts
No items found.