So, history lesson.
Back in 2011, when Gov. Rick Snyder first took office, he made some big changes. He wanted to give his corporate friends a billion-dollar tax break, but that money had to come from somewhere.
So, what did he do?
A lot of things. First, he cut funding to schools by $470 per pupil. Then he turned on the state tax code, shredding corporate taxes while adding to the tax burden of working families and seniors.
Families lost many of the tax credits and deductions they’d relied on. The Homestead Property Tax Exemption was gutted, as was the Earned Income Tax Credit. The $600-per child deduction was eliminated.
And then he went in on the seniors.
A new tax on their retirement income was imposed, meaning that people who were living on a fixed income, often barely making ends meet, suddenly had to pay a new tax on the little income they were making. The tax cost some seniors thousands of dollars a year, and that’s a lot when you’re already wondering how to keep the lights on, put food on the table and afford prescriptions.
Republicans sold this as a “pension tax,” because, you know, who gets a pension? Just teachers, government workers and union members anymore, right? And they banked on the willingness of people who don’t get to look forward to a pension to turn their antipathy against those who do. But this was a lie.
In fact, the senior tax applies to ALL retirement income, whether a pension, a 401(k) or an IRA. All of it.
People started noticing the tax when they went to file their taxes in early 2013, and seniors weren’t happy about it. That’s why there have been a number of politicians, on both sides of the aisle, who have argued about eliminating the tax. In 2015-16, Tom Barrett (R-71) had introduced that plan, but before, it was introduced by Democrats such as Theresa Abed, a Democrat who also represented the 71st District in 2013-14. And now it’s the baby of Sen. Rick Jones (R-24)
But enough Republicans have been against this that it never gained traction. So the repeal bills have just sat there. And they will continue to, if Gov. Snyder has his way.
In the governor’s explanation of his opposition he noted that “it’s not a senior pension tax. What we put out is helping a broader base of Michiganders that really needed that benefit…it’s a better system than what we had before.”
Well, that’s a bit nonsensical, gov. I’d try to tear apart what you just said, but … what did you just say? A tax on seniors is not a senior tax, and people really needed what benefit exactly? This is word salad.
At least Snyder is against the idiotic plan to eliminate the personal income tax, which is a gimmick proposal that would utterly disembowel the state budget.
Regarding a GOP-only effort to rollback the state income tax rate, the governor noted that there is a Homestead property tax break in next years budget along with a long-term income roll back inserted into the so-called road fix package. The governor warned everyone that “when people talk about rollbacks, near term, the big question to ask is what are your going to otherwise cut or where are you going to get other revenue to replace that?” Having said that he offered, “I’m open minded but people have to answer that part of the question.”
Well! I’m so glad you asked, governor!
How about we move away from Michigan’s regressive income tax to a graduated one, so that everyone pays their fair share and the wealthy aren’t let off the hook.
How about we take back some of those tax breaks that corporations have been enjoying at our expense.
How about ending corporate welfare for companies that take our tax dollars and then send jobs out of state anyway?
I don’t know. Just spitballing some ideas. You think about it and get back to us.