Scale Back These Discounts for Seniors

Q. I’m in a circle of friends who are all elderly and well-off financially. Most of us are pleased to accept senior-citizen discounts for hotels, movies, museums and mass transit, but one member of our group says we should turn them down and pay full price. She argues that we have less need than most young adults, who can’t get such discounts. What do you think?

A. I like your friend’s thinking. As I wrote in a 2008 "Money & Ethics" column, “Discounts for seniors go back to an era when most elderly Americans were less well-off than their fellow citizens. That’s no longer the case, but the discounts linger.”

I see a key distinction, however, between senior discounts offered by commercial companies—hotels, theaters, restaurants and the like—to attract your business, and discounts offered by governments and private nonprofits out of a sense of compassion for seniors who are struggling financially.

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The revenue forgone in discounting by a business comes out of the profits of its owners, and they are free to subsidize any customers they wish (whether seniors, students, military, clergy or frequent buyers). But senior discounts given out by governments—if lacking a screen for income—constitute a broad, unjustified subsidy of all elderly citizens by taxpayers, many of whom are younger and less well-off.

For example, Washington, D.C., and the state of New Jersey allow seniors to travel on their rapid-transit systems for about half the normal fare. Chicago waives the public sewer charge for seniors living in single-family homes. The federal government allows seniors with a $10 lifetime pass to use national parks free, with 50% discounts on many of the amenities. New Jersey gives discounts to elderly hunters and fishermen. And the list goes on.

None of these discounts requires senior citizens to show that they have financial need. Replacing an age screen with proof of need, however a government wishes to define that, would put all such discounts on an ethical footing.

Have a money-and-ethics question you’d like answered in this column? Write to editor in chief Knight Kiplinger at ethics@kiplinger.com.