Hoffa: Repeal The Pension Tax On Michigan Seniors

Posted: June 11, 2014
Source: James P. Hoffa, The Detroit News
Gov. Rick Snyder talked a good game during a forum last week in Rochester about how to improve the lives of older Michiganders. But he keeps on missing the most obvious way to do so — repealing a pension tax he championed three years ago.

IBT President, Jim HoffaWhile he acknowledged during his delivery of a special message to the Legislature on aging June 2 that the state has “work to do” to improve the lives of Michigan’s growing population of seniors, evidently ending the tax on hard-earned pensions of thousands of retirees is not part of the solution.

In fact, Gov. Snyder defended the move ending the exemption of pensions from state income tax, saying in an interview before his speech that it wasn’t fair to assess income sources differently. But those who worked decades in return for their pensions certainly see it otherwise, as they are now in some cases paying hundreds of dollars a month in income tax.

A Michigan House study conducted in 2011 showed the financial bite for many is significant. For instance, a retired couple born after 1952 with more than $50,000 in income, including $48,000 in pension benefits, paid $1,930 more in taxes than they would have if pensions weren’t taxed.

Why was this done in the first place? To give big business an 86 percent tax break, that’s why! At a time when many in the middle class are struggling, approving a pensions tax wasn’t a good move when it was implemented, and isn’t good policy now.

When studies are finding people are working more than ever and receiving little in return, shouldn’t lawmakers be standing up for the average worker? After all, corporate America and the nation’s wealthiest are riding the wave of a near-record stock market. Meanwhile, wages are down even for many of those lucky enough to have a job.
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