Robert M. La Follette School of Public Affairs

Full Exclusion of Retirement Income from State Taxation: Evaluating the Impact in Wisconsin

This report investigates the revenue, distributional, and migration impacts of a full exclusion of retirement income from Wisconsin state taxation. The authors' review of public finance literature and an analysis of the migratory patterns of older adults in Wisconsin indicate that state income tax preferences for older adults have limited to no impact on elderly interstate migration. The exclusion would benefit primarily individuals with higher incomes and increase the differential tax burden between younger and older Wisconsin residents. The analysis demonstrates that foregone state revenue resulting from the exclusion would increase in dollar terms and as a percentage of total state income tax revenue as the population ages. Presentation slides

Additional Info

  • Volume or issue no.: Workshop in Public Affairs, Public Affairs 869, taught by Andrew Reschovsky in Spring 2013
  • Author(s): Ed Cubero, Sam Harms, Andrew Kleps, Katie Paff, and Angela C. Waltz
  • Client Name: the Wisconsin Department of Revenue