Lawmakers Want "Pension Tax" Repealed

By: Fay Li Email
By: Fay Li Email

The tax on retirement income was first rolled out as one of the ways to help finance a $1.5 billion tax reduction on businesses. Some people could be feeling the pinch for the first time as they file taxes this year.

"It's not just for pensions, it's for any retirees," said Sen. Rick Jones, R-Grand Ledge, who introduced a bill to repeal this tax.

It's a tax on retirees under the age of 67 and lawmakers on both sides of the isle want it gone. Republicans introduced a bill and Democrats asked for it as part of their "Middle Class Plan."

"I had many people tell me how can I live on $100 less a month when I'm retired and I can't work," said Rep. Andy Schor, D-Lansing.

So far, getting the tax removed is an uphill battle that seems near impossible. Gov. Snyder is against repealing it. His Director of Strategy, Bill Rustem, says it's unfair to shift the tax burden onto the younger generation.

"We were driving young people, businesses and entrepreneurs out of the State of Michigan in the old system," Rustem said.

He called the previous system of near tax free retirement income a model that's rewarding the past and punishing the future. Consensus revenue estimates show that the new tax is generating more than $330 million per year for the state. So far, lawmakers haven't offered alternatives.

"Well it's a work in progress, I think we could've done it differently," said Sen. Jones.

"House Democrats are going to put out our priorities for that coming up in the next few weeks as we work on the budget," said Rep. Schor.

You must be logged in to post comments.

Password (case sensitive):
Remember Me:

Read Comments

Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Clutch Location: Flint on Apr 11, 2013 at 07:36 AM
    Another reason to get rid of the republicans who jumped on Snyderly whiplashs' bandwagon to increase taxes on the poor and give to big business.
  • by Ricardo Location: Lansing on Apr 3, 2013 at 04:22 AM
    Hmmm, isn't it the "lawmakers" job to write laws?. Just write the law, and pass it. Stop grandstanding and get it done. Thank you. Ricardo
  • by Gary Location: Sheridan on Apr 2, 2013 at 07:27 AM
    Now for the bad news. If you’re a senior living in Michigan you might consider relocating. The Great Lakes state is the worst for retirees. Why? From the report “Michigan ranked below average in every category, and particularly low scores on climate and economic factors hurt the state’s ranking. Michigan was not among the 10 worst states in any single category, but consistently low scores across the board gave it the worst overall total According to forbes online
  • by Name Location: Location on Apr 2, 2013 at 07:26 AM
    We were one of only a handful of states that gave that discount. If it was hard earn, then they would have paid the taxes on it already. These pensions were created before taxes was taken out.
  • by Mariah Location: Bath on Apr 2, 2013 at 03:55 AM
    @Anonymous(7:56pm): No. The special group which got the big tax break was big business, and it was given on the backs of retirees who had already spent their entire lives working and carefully planning on how they would survive financially upon retirement. What do you suggest, that all retirees be required to go back to work? Then you'd complain that they were taking all the jobs! What's next -- the summary execution of all seniors so you can take all their hard-earned saved money at once?!
  • by William Gerry Location: Ft. Myers, FL on Apr 2, 2013 at 03:52 AM
    Exactly why me and many other retired MI citizens are now residents in FL. Has anyone figured the net effect of the loss of tax revenues compared to the $330 million generated? I took on the tax burden during my working years as part of the "younger generation." Reason #101 as why I'm enjoying life in FL.
  • by Retired and still paying Location: Holt on Apr 1, 2013 at 08:33 PM
    I guess Mr. Rustem must have hit his head, because has lost all of his common sense. Young people are more able to take on the extra tax burden than people of advanced ages who are living on fixed incomes. He asked for a solution that could replace the needed money, I have two. First they could simply reinstate the tax on businesses. Most of these small busnesses already avoid most of their tax obligations by only reporting a small fraction of their incomes (sales). The second option would be to take advantage of the massive work force that is sleeping in everyday and only getting up and out of the subsidized house to collect their welfare check. Put these able bodied people to work, (workfare instead of welfare) and collect income taxes from them. Hey it worked for FDR eighty years ago, why not try it again. Help these people get some self-respect back. The CCC was a great model economic recovery. It brought us out of a depression then and we are only in a recession now. Think about it.
  • by Anonymous on Apr 1, 2013 at 04:56 PM
    so we want to give a special group a big tax break
WILX 500 American Road Lansing, MI 48911 517-393-0110
Copyright © 2002-2016 - Designed by Gray Digital Media - Powered by Clickability 200959681 -
Gray Television, Inc.