Right off the bat, I need to tell you that I’m a retired state employee, so you can’t use the “you young whippersnapper” argument against me when I say this:

Old people in Hawaii should pay more state taxes.

Right now, Hawaii is a tax haven for the elderly. The majority of states as well as the federal government tax Social Security. Hawaii does not.

Unlike almost all other states, Hawaii also exempts all employer-funded pensions, all out of state government pensions as well as other military federal, state and local benefits. Even some private pensions are exempt.

Not all old people are the same. So why does our tax system treat them all the same?

Vinoth Chandar via Flickr

Moreover, Hawaii taxpayers over 65 get a base income exemption that is twice the size of everyone else’s.

Quite an impressive list, no?  As far as this generosity to seniors goes, only two other states in the country come anywhere close.

Hawaii’s tax policies regarding the elderly are unfair and unjustifiable. They diminish seniors’ obligations.

What’s more, these tax breaks are not good for old people because they stereotype seniors and misconceive the aging process.   

They infantilize old people. They diminish seniors’ capabilities.

Aghast at Abercrombie

Some background: In 2011, citing the need for “shared sacrifice,” Gov. Neil Abercrombie proposed a progressive tax on retirement pensions.  The bill would have exempted low- and middle-income people from the tax.

For most lawmakers, the bill was worse than wrongheaded. It was horrifying, beyond the pale of discussion, truly and utterly toxic.

Some of this was about straight politics. Public employee unions, the AARP, and many seniors were strongly opposed. Elderly people vote more than anyone else, and the AARP is one of the most powerful lobbyists in the country.  And union opposition? Say no more.

The exemption may be good politics, but it is fundamentally unfair.  It is simply a tax break for a powerful special interest group, in this case the elderly.

Hawaii’s income tax laws purport to be progressive, which means people get taxed according to their ability to pay.  So from a progressive taxation perspective, oldness is a bogus category because age says nothing about ability to pay.

Sure, there is a lot of poverty among the elderly, and the number of people who have to eke out an existence purely with Social Security is frightening.   

People over 65 on average are in the lowest income bracket, but that says nothing about the range of income within this category.

There was something besides politics involved in the uproar over Abercrombie’s tax. There was more than a whiff of paternalism.

Tax-wise, you should make decisions regarding these people because they are poor, not because they are old.

The handyman you hire to make those small but essential repairs you are too incompetent to fix yourself — a 40-year-old husband with a couple of kids, maybe one of whom goes to private school — pays income taxes on his $60,000 a year income.  Your neighbor, a retired economics professor with a pension the same size, pays nothing.

Why? Because the older person needs more money? From a tax policy standpoint, how do you know this?

Well then, it must be because, because … the only answer is because that former prof is — wait for it — old.

Really?

Of course when it comes to fairness of a progressive tax policy, the devil is in the details. Fine, so let our lawmakers struggle over the details, but don’t dismiss out of hand the idea of taxing the elderly.

As Hawaii’s age-based tax laws stand now, wealthier retirees hide behind the skirts of the poorer ones.

There was something besides politics involved in the uproar over Abercrombie’s tax. There was more than a whiff of paternalism.

Old people should be spared these taxes because they deserve it, because they are old, poor things. It’s a sign of respect. By doing so we honor our kupuna. 

A well-meaning sentiment, but enough already because it’s harmful to the very people it is trying to help.

Some Need Charity and Some Don’t

Lumping old people together is a way of looking right past them. Any elderly person can tell you that there is more than enough of that already. And the poor-auntie-poor-uncle sentiment can get, you should excuse the expression, real old real fast.

Categorizing is dehumanizing.  It reinforces stereotypes and ignores the vast and growing range of differences among people over 65. These differences are more important than the similarities.

Hawaii’s population like the rest of the U.S. is aging and will continue to do so. Now there is more of every kind of older person, like the healthy, active, still-independent seniors still pretty much on top of their game — the 70-is-the-new-50 kind.  But there are now many more people with all kinds of functional disabilities, including cancer and Alzheimer’s.

Growing old is about growing stronger emotionally and socially as people weaken physically.

People over 80 are the fastest-growing demographic group in the U.S.  One-third of people 85 and older has Alzheimer’s disease. As people in the aging field put it, there is old and there is old-old. 

Lumping the old together made more sense as part of what used to be the prevailing view of aging that guided everything from pop culture to public policy to the ways that retirement homes were constructed. 

That view accurately reflected reality at the time when people retired at about 65 and lived just a few years more. 

Today things are dramatically different. For instance, “housing for the elderly” is an outdated term. Nowadays housing for older people includes an extraordinarily wide range: remaining in your own home with or without some outside assistance; suburban-style assisted living facilities with amenities like gyms and sports bars; long-term nursing facilities; and “memory units” that cater to the rapidly growing number of people with Alzheimer’s.

Many more people are living to be old-old, which increases the number of seniors with serious infirmities. But despite these infirmities, aging enhances other capacities. Growing old is about growing stronger emotionally and socially as people weaken physically.

They Really are Golden Years

Recent research on aging, which Jonathon Rauch nicely summarizes in the December 2014 issue of The Atlantic, shows how out of date the “one-size-fits-all- those-poor-old-folks model” is.

A growing number of studies show that despite their infirmities, older people are happier than anyone else.

The relationship between aging and happiness takes the form of a u-curve.  People’s sense of well-being is high in their teens and then begins to drop gradually, reaching its lowest point in middle age. After that our sense of well-being continues to climb as we age and essentially never stops until infirmities totally incapacitate us. 

People over 80 are happier and more satisfied with life than is any other age group. As Jonathon Rauch puts it, “The peak of emotional life may not occur until well after the seventh decade.”

This research also shows that older people have enhanced social skills.  They are, in Rauch’s word, “prosocial.”

Studies of the elderly show that they tend to have high levels of empathy. They have a high level of tolerance for diverse values and well-developed social reasoning skills. In short, they have a broad perspective and the capability to use it.

Phillip Geste, a psychiatrist who has done extensive studies of the aging process, calls this combination of traits “wisdom.”

Keep in mind that these findings do not apply only to the “70-is-the-new-50” group. They apply to the widest range of people as they age — average old people.

People over 80 are happier and more satisfied with life than is any other age group.

Emotional comfort, prosocial, social skills, tolerance — those sound like the sorts of traits that should make us want to engage old folks rather than see them simply as past their prime.

That’s engagement rather than paternalism, seeing them as full citizens rather than as children who need protection. 

Older people have the capacity and the interest to do much more than simply consider their own self-interest.

In his recent inaugural address, Gov. David Ige captured this perspective when he described his parents and grandparents this way: “All that they suffered and all that they endured, they did so willingly for the sake of their children and the future.

“Their children, my father’s generation, had an equally strong sense of history and of things bigger and more important than themselves.”

In short, we should see older people as full citizens with the capabilities and obligations that entails.

The tax exemption is more than simply unfair. In light of what we have come to know about aging, it is archaic and paternalistic. 

With the tax exemption everyone loses, and not just money.