It’s hard to find any defenders of the so-called pension tax that passed in 2011 as part of GOP former Gov. Rick Snyder’s tax overhaul that included a big cut to corporate taxes.
And on Thursday, legislation axing the tax cleared the House Tax Policy Committee on a 14-1 vote. The lone “no” vote on HB 4006, sponsored by state Rep. Joseph Bellino (R-Monroe), came from state Rep. Isaac Robinson (D-Detroit).
“Repealing the change in the 2011 pension tax has been a point of discussion for many years,” said Bellino. “It’s time to stop balancing the budget on the backs of seniors.”
Gov. Gretchen Whitmer said during the 2018 campaign that she supports eliminating the pension tax. On Tuesday, she will reveal her fiscal year 2020 budget to the Legislature.
The 2011 tax change removed the exemptions for income for public and private pensions. The tax structure differs based on age. It’s also been called the “senior tax.”
Getting rid of the pension tax isn’t cheap, however. It would mean $330 million less in revenue for the state budget, according to an analysis from the nonpartisan House Fiscal Agency.
The bill moved to the state House Ways and Means Committee, where it must pass before it goes to a full vote of the House.