Michigan used to fully tax private pensions

| Thursday, February 24, 2011
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The Michigan Truth Squad is out with its in-depth analysis of Gov. Rick Snyder's budget proposal, which has something to upset just about everyone.

In particular, Snyder's plan to tax public and private pensions has angered senior citizens. And groups representing low-income working families are loudly protesting his proposed elimination of the earned income tax credit.

But like it or not, the governor's plan is a bold attempt to overhaul the tax code and address a structural deficit that's existed in the state budget for years.

I'm a member of the Truth Squad and prepared the tax portion of the analysis. One of the interesting tidbits I discovered was that Michigan fully taxed private pensions in 1967, the year the state enacted the personal income tax under Republican Gov. George Romney. (Public pensions have never been taxed.)

A portion of private pension income was exempted from taxation in 1974. Exemptions were greatly increased in the early 1990s and indexed for inflation to the point where most pensions are fully shielded from state taxes.

Snyder says his budget is designed to fix state finances in the long run and create an environment for significant job creation.

For the next few months, at least, the controversial budget plan is a full employment act for Lansing lobbyists.

1 comment:

gaylord g mitchell said...

while i do not like the pension tax in any way shape or form,when it was first to come up for debate EVERYONE PAID something. that was something i could live with,then the big boys started giving this group and that group a little deduction. well i could live with some of that. well along came 31dec52 anyone born before that date got a 20000-40000 deduction,1jan53 and after sorry wait until 67.the first group of people born before 1946 got everything like it was before. and all i hear is FAIRNESS. has any of these very smart people looked at the total amount of income many of these older people have. the 1946-1952 crowd smae way as far as income goes. again the 1jan53 and after crowd already retired sorry. now these people want to raise the gas tax,registration on cars,trucks, etc. get rid of property tax on business(i wonder how they are going to do that one)i have a gooooooood idea how they will HELLO PROP A go to the dustbin. very high car insurance.i got a letter about my property tax value is down tax is going up. i know i will hear all the tech talk about the proper way things operate.democrats do things very stupid as a rule,but you know what i got to wonder about republicans. i voted republican about 90% of my life

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