House makes 1st stab at killing pension tax

    Women's March in Detroit, Jan. 19, 2019 | Ken Coleman

    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.

    Isaac Robinson

    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.

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    Susan J. Demas is an 18-year journalism veteran and one of the state’s foremost experts on Michigan politics, appearing on MSNBC, CNN, NPR and WKAR-TV’s “Off the Record.” In addition to serving as Editor-in-Chief, she is the Advance’s chief columnist, writing on women, LGBTQs, the state budget, the economy and more. Most recently, she served as Vice President of Farough & Associates, Michigan’s premier political communications firm. For almost five years, Susan was the Editor and Publisher of Inside Michigan Politics, the most-cited political newsletter in the state. Susan’s award-winning political analysis has run in more than 80 national, international and regional media outlets, including the Guardian U.K., NBC News, the New York Times, the Detroit News and MLive. She is the only Michigan journalist to be named to the Washington Post’s list of “Best Political Reporters,” the Huffington Post’s list of “Best Political Tweeters” and the Washington Post’s list of “Best Political Bloggers.” Susan was the recipient of a prestigious Knight Foundation fellowship in nonprofits and politics. She served as Deputy Editor for MIRS News and helped launch the Michigan Truth Squad, the Center for Michigan’s fact-checking project. She started her journalism career reporting on the Iowa caucuses for The (Cedar Rapids) Gazette. Susan has hiked over 3,000 solo miles across four continents and climbed more than 60 mountains. She also enjoys dragging her husband and two teenagers along, even if no one else wants to sleep in a tent anymore.

    2 COMMENTS

    1. FOR IMMEDIATE RELEASE
      Thursday, Feb. 28, 2019
      Contact: Rep. Isaac Robinson
      Phone: (313) 739-5093

      Robinson on bill to repeal retirement tax passing out of committee:

      LANSING — Today, House Bill 4006, which would eliminate the damaging retirement tax passed in 2011, was voted out of the House Committee on Tax Policy. The bill would also restore the senior investment deduction for those 65 and older born after 1945. During committee, Rep. Isaac Robinson (D-Detroit), supported an amendment to hold the School Aid Fund harmless and a motion to refer the bill to the Appropriations committee to resolve the impact in funding the bill will have, yet both were voted down. The bill was ultimately referred to the Ways and Means committee. In response to his objection to the bill’s referral to the Ways and Means committee and his subsequent no vote Rep. Robinson, issued the following statement:

      “Tackling the retirement tax was one of my top priorities coming into office, so I am grateful my colleagues share my desire to address this quickly. I fully support House Bill 4006 and I am encouraged by the bipartisan support. Seniors on fixed incomes need to be able to keep more of their money to live comfortably and make sure all of their needs are met. Gov. Snyder’s pension tax is hurting their ability to do so.
      “I am deeply committed to eliminating this regressive tax, however I do have some concerns on the impact of the bill. I wasn’t elected to do a sloppy job tackling these large-scale problems — I want to get this done right. I agree with Gov. Whitmer, the concept of this bill is good policy and the right thing to do but we need to do it the right way and go through the budget process. That being said I will continue fighting for the financial security of our seniors and ensuring our children continue to have bright futures, and I look forward to working with my colleagues to ensure that this bill is passed.”

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    2. Repealing this ridiculous pension tax placed on retirees should not be lump in with any school funding issues. Already a retired state employee when this pension tax went into effect was highly unfair me and others. Years ago the state legislature promised state employees during wage negotiations that their future pensions would never be taxed by the state as part of wage concessions. As can be seen this was a lie. This pension tax needs to be repealed immediately!

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