Am I the only one who views Gov. Snyder’s pension tax compromise with Republican lawmakers as a confusing, complicated mess?
Turning his back on the goal of simplifying the tax code, Snyder agreed to set one tax rate for those 67 and older — starting in 2020. Those born between 1946-52 will pay a different rate due to different exemptions. And those born before 1946 will continue to enjoy Michigan’s unrivaled tax-free status for nearly all retirement income.
What’s this?
I’ve made it clear that I think seniors should not be allowed to escape paying income taxes. But a reasonable compromise would be to simply say that seniors receive a $10,000 exemption, $20,000 for retired couples. That would be a reasonable softening of the original Snyder plan to tax all retiree income in the same vein as the levy on a worker’s earnings.
After all, seniors don’t pay taxes on Social Security income, they receive the standard $3,600 personal exemption, plus they receive the bulk of the state’s property tax credits, despite another Snyder compromise on that provision.
I haven’t researched this, but I would bet most lawmakers would be stunned at the number of Michigan seniors who receive a pension of less than $10,000.
If you want to quiet the complaints that those on fixed incomes should not be shouldered with new tax burdens, this multi-tiered incomprehensible compromise is not going to do the trick.
