THE BLOG
01/06/2014 10:51 pm ET | Updated Mar 08, 2014

Michigan Seniors Will Feel the Pain of Governor Snyder's Insensitive Tax on Pensions

I would like to know what Governor Snyder has against senior citizens. It seems as though he keeps devising schemes to make life more difficult for Michigan retirees -- the hard-working people who made our state the manufacturing capital of the world for a generation. It must be the dogged CEO in him, the strict businessman who only sees the dollar figures and not the people behind those numbers.

To me, that's the only explanation for Gov. Snyder's scheme to raise taxes on pensions for senior citizens across this great state. It was only fair, the governor said. The Michigan Business Tax was unfair. When he ran for governor, he promised businesses a tax break and he intended to keep his promise. During his campaign, however, he failed to mention where the money would come from to pay for that business tax cut. Who better to pay than senior citizens on fixed incomes? Come now, you say, that can't be true. Well, it's the truth and it's even worse when you look at it a bit closer. Businesses got an 86 percent tax cut while the average retired autoworker trying to make ends meet on $32,000 annually paid $1,437 in unexpected taxes this year. Ouch! So, I wonder again, what does Gov. Snyder have against senior citizens?

Gov. Snyder's new pension tax has a complex three-tiered system. It kicks in differently depending on your date of birth. For the vast set of new retirees forced to leave the work force early during the downward plunge in the worldwide economy around 2009, it catches them before they turn 60. The system is so complex, you'll need to ask your tax accountant to explain it to you. In general, seniors will now pay a whopping 4.35 percent of their pension income in state income taxes -- that's $435 for every $10,000 in pension income. Do the math on your own pension and you'll see how it hits your home budget. In addition, retirees no longer have access to Michigan's special senior citizen tax exemption of $2,300 annually. Gov. Snyder eliminated that exemption, while raising the tax rate. Therefore, Michigan senior citizens funded $330 million in business tax cuts this year. The governor might as well erect an exit sign and point it toward retirement communities in other states far from grandchildren and lifelong friends.

Gov. Snyder seems to have a special place in his Grinch-like heart for the people who devoted their lives to working in public service -- he hit them even harder. Yes, our devoted firefighters, our police and our teachers will pay. It used to be that public-sector employees were exempt from pension taxes. Even though Gov. Snyder has made it his legacy to slash the salaries of public-sector employees, he will hit them yet again when they retire. Now public-sector retirees will have to pay pension taxes for the first time in the history of this state. Yes, it will be Happy New Year, because this will be the year we will work to turn the tide of Michigan Republicans horrific attacks on retirees, the working class, and women.

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