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http://www.freep.com/article/201102...roposal-tax-pensions-stirs-up-anger-confusion


Gov. Rick Snyder is telling key leaders that his plan to tax retirement income -- scheduled for presentation to the Legislature this morning -- is only one component of a sweeping reformation of Michigan government taxing and spending.

But as reaction to leaked reports about it Wednesday demonstrated, it's a big one.
The Snyder plan had freep.com forums and talk radio buzzing with outrage, questions and more than a little head-scratching. The same was true at the state Capitol, where Republican lawmakers, for the most part, kept their distance from the issue, and Democrats tried to hide their delight at the prospect of a GOP-sponsored plan to add nearly $1 billion in taxes on senior citizens.
Administration officials said Snyder will clear up the confusion today when he outlines a comprehensive plan for deep spending cuts in many areas, a $1.5-billion business tax cut and an array of new revenue.
The overall goal of the tax policy, sources said, is "fairness and equity," distributing the burden of paying for government more widely, while creating an atmosphere conducive to job creation.
Even with the proposed tax hike, the net tax burden on Michiganders will decline by about $250 million in 2012, administration sources said.
The retirement tax proposal would remove income-tax exemptions for public and private pensions (and other retirement income not currently subject to state taxation, like payouts from IRAs). It would affect about 900,000 taxpayers and raise about $900 million in the first year, enough to largely offset Snyder's proposed $1.5-billion cut in taxes to business.
Currently, the state does not tax pensions of public retirees -- teachers, police, firefighters and government officials -- and sets a high threshold for taxing private pensions and retirement income: $41,120 for individuals and $90,240 for joint filers.
Curtis Jones, 62, a retired Detroit Public Schools substitute teacher, said Snyder doesn't understand the difficulty of living on a fixed income.
"He's rich, and he really doesn't care," Jones said. "We should be exempt from paying taxes on pensions. Next thing, they'll want to tax Social Security."
(Page 2 of 2)
Snyder's plan would not tax Social Security, according to a source familiar with the governor's tax plan.
The report on Snyder's plan to tax pensions generated a flood of commentary.
Rep. Richard LeBlanc, D-Westland, posted this on Facebook: "I'd like to thank those who 'leaked' the story that Governor Snyder plans to suggest taxing private pensions. Email is clogged; phones are ringing; fax machine is out of toner."
Matt Marsden, spokesman for Senate Majority Leader Randy Richardville, R-Monroe, said he would have no comment until the budget is presented.
"We will look at whatever the governor proposes that's good or difficult to stomach," Marsden said.
By Wednesday evening, state Sen. Roger Kahn, R-Saginaw, was willing to go farther. Kahn, in his final term in the Senate, said he would sponsor the retirement tax plan if it is part of an approach that encompasses shared sacrifice.
"We've got to create an environment where there is at least some hope of jobs," Kahn said.
But Louis Horvath, 74, of Westland, a GM retiree, said that if pensions are taxed more, executive bonuses should be, too. "They're always talking about the working man enjoying all these benefits," he said.
AARP Michigan, which represents seniors' interests, won't support taxes on pensions if Snyder's budget plan doesn't require sacrifice from others, as well, spokesman Mark Hornbeck said.
Other expected highlights in the budget plan include:
• A $400-million cut in prison spending, the details of which remain cloudy.
• A cut in the state's per-pupil funding for K-12 schools.
Contact Dawson Bell: 517-372-8661 or [email protected]

Page 1 of 2



:thumbsup:
 

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This goes to show why we can never get anything accomplished toward solving our financial problems. Every effort is immediately politicized and used to turn group against group. I don't know enough about this plan to even have an opinion whether it is a good one or not. But I do know that smart leaders will try to reduce the tax burden on businesses so they can prosper, grow, and add more jobs. The left can't stand this concept, but it really is the best route to prosperity for a state.

Another thing: I read an article yesterday by an economist that said nothing - no amount of raising taxes, no amount of spending cuts - would impact our deficit as much as raising GDP by 1%. He was saying what I said above. If we want to climb out of this hole, it won't be with taxes. It will be with a healthier business climate, increased GDP, and the increased consumer spending that brings. We need to quit over taxing and over regulating our businesses so they can compete and prosper.
 

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This goes to show why we can never get anything accomplished toward solving our financial problems. Every effort is immediately politicized and used to turn group against group. I don't know enough about this plan to even have an opinion whether it is a good one or not. But I do know that smart leaders will try to reduce the tax burden on businesses so they can prosper, grow, and add more jobs. The left can't stand this concept, but it really is the best route to prosperity for a state.
That's not gonna happen, this is end game, the treasury is empty, the dollar is worthless, the US produces nothing besides debt and everyone else already has enough of that.

Another thing: I read an article yesterday by an economist that said nothing - no amount of raising taxes, no amount of spending cuts - would impact our deficit as much as raising GDP by 1%. He was saying what I said above. If we want to climb out of this hole, it won't be with taxes. It will be with a healthier business climate, increased GDP, and the increased consumer spending that brings. We need to quit over taxing and over regulating our businesses so they can compete and prosper.
:laughing:
 

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That's not gonna happen, this is end game, the treasury is empty, the dollar is worthless, the US produces nothing besides debt and everyone else already has enough of that.



:laughing:
Got an alternative?
 

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ok, they are being asked to pay taxes on income....the problem is? If/when I retire from the Army, my retirement check will be taxed unless I am rated at 100% disability....

I see no reason why if military retirees not 100% disabled have to pay taxes, others should complain about paying as well....
 

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ok, they are being asked to pay taxes on income....the problem is? If/when I retire from the Army, my retirement check will be taxed unless I am rated at 100% disability....

I see no reason why if military retirees not 100% disabled have to pay taxes, others should complain about paying as well....
They are asking them to pay state tax on their pensions, many states exempt public/federal pensions from state and local tax. All pensions are subject to Federal tax.
 

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Discussion Starter #8
ok, they are being asked to pay taxes on income....the problem is? If/when I retire from the Army, my retirement check will be taxed unless I am rated at 100% disability....

I see no reason why if military retirees not 100% disabled have to pay taxes, others should complain about paying as well....
This party was voted IN......to reduce govt spending, NOT raise taxes.

It's more the overall failure of promises.
 

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Rick Snyder is such a failure, a recall vote should commence immediately. :rolleyes:

Under Snyder's official budget proposal, the state would eliminate the controversial Michigan Business Tax and replace it with a flat 6 percent corporate income tax, which would equal a $1.8 billion tax cut. That's a proposal he's been discussing since the early days of his gubernatorial campaign.

Some 95,000 companies — mostly small business owners who pay taxes through their personal income tax return — would no longer have to pay business taxes under this proposal.
http://www.annarbor.com/business-re...siness-taxes-credits-for-film-high-tech-batt/
 

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Discussion Starter #10
"Under Snyder's official budget proposal, the state would eliminate the controversial Michigan Business Tax and replace it with a flat 6 percent corporate income tax, which would equal a $1.8 billion tax cut. That's a proposal he's been discussing since the early days of his gubernatorial campaign.

Some 95,000 companies — mostly small business owners who pay taxes through their personal income tax return — would no longer have to pay business taxes under this proposal.
Which will create a few billion shortage that will be made up with state tax increases to the tax payers of Michigan.
 

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Discussion Starter #11


Under Snyder's official budget proposal, the state would eliminate the controversial Michigan Business Tax and replace it with a flat 6 percent corporate income tax, which would equal a $1.8 billion tax cut. That's a proposal he's been discussing since the early days of his gubernatorial campaign.

Some 95,000 companies — mostly small business owners who pay taxes through their personal income tax return — would no longer have to pay business taxes under this proposal.
Where's the promised GOP pledge to reduce govt spending?


This is NOT it.
this is a sidestep.
just like the union bashing across the country.

both are tax increases.
 

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if business prospers, there will be an INCREASE in overall tax income to the state. Look at states like IL that are very anti-business. Business there are leaving in droves and tax revenue is drying up as a result
 

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Discussion Starter #13
if business prospers, there will be an INCREASE in overall tax income to the state. Look at states like IL that are very anti-business. Business there are leaving in droves and tax revenue is drying up as a result
The Governor is announcing his budget proposal.

This is not a budget.
It's a list of tax increases.

Small business will get a transference of wealth from state tax payers to them in the form of a tax cut (which they are overdue for) to eliminate a double taxation, but there are almost no reductions in the state budget......

only tax increases for the general population....aka


non-business owners.

There is almost no spending reductions.
He's even extending a previous broad temporary tax increase that was instated during the recession by the previous democratic governor.

No budget.
Just more taxation.


http://www.mlive.com/politics/index.ssf/2011/02/gov_rick_snyders_budget_delive.html


LANSING -- Seeking to gain additional revenue from seniors to provide jobs for the young, Gov. Rick Snyder is expected Thursday to unveil a budget and tax overhaul that finances a $1.5 billion business tax cut with an overhaul of Michigan’s personal income tax code.

All retirement income, including pensions, but not Social Security, would be taxed in that overhaul. Additional exemptions for seniors and children would be axed. And the income tax rate, set to decline to 3.9 percent, would be maintained at 4.25 percent following a scheduled one-year reduction in 2012. The $3,700 personal exemption would phase out for single filers with $75,000 in income and joint filers with $150,000.

Michigan's homestead property tax credit would be rewritten to provide equal benefit to senior and non-seniors, but the maximum credit would remain at $1,200. The income threshold to be eligible for the credit would drop from $83,000 to $61,000.

On the spending side of the ledger, city officials in Michigan were bracing for what could be a 40-percent reduction in their revenue sharing payments, a straight cut of some $400 million with $200 million added back for cities that meet new standards for cooperation and cost cutting Snyder’s budget presumably will outline.

“We’re going from a program that was revenue sharing to revenue stealing,” said Summer Minnick of the Michigan Municipal League. “This was created when locals gave up local taxing authority and (state elected officials) have been slowly taking it away to fill their own budget hole. Local citizens are going to feel the impact.”

Michigan’s 15 public universities could see a 15 percent, $225 million reduction in state aid.

Michael Boulus, a lobbyist for the schools, said that would nearly equal all of the higher ed cuts made in the last decade. “It’s a big number” that would move Michigan “in the wrong direction.”

In an interview Wednesday, Lt. Gov. Brian Calley said the twin goals of the tax package he and Snyder will present to lawmakers at 11 a.m. Thursday are designed to make Michigan more economically competitive while making the tax code more fair, simple and easier to understand.

Currently, all retirement income from public pensions is exempt from income tax. Private pension and investment up to $90,240 for joint filers is exempt. But Calley said “senior citizens who have to work and don’t have pensions are fully taxed.”

“When you look at the difference in treatment depending on source of income, the principal is that is should be fair and even,” Calley said.

According to an income tax report by the Michigan Department of Treasury, taxpayers under the age of 35 reduced their adjusted gross income an average of 5.7 percent through deductions. For taxpayers 65 an older, the average deduction was 62 percent.

Maintaining the deduction on Social Security income ensures “we don’t harm the folks that really need help,” Calley said.

Taxing retirement income would generate some $900 million toward the $1.5 billion cost of Snyder’s plan to replace the Michigan Business Tax with a 6-percent profits tax on firms that file a federal corporate income tax return.

Senior advocates said they could support a “fair and balanced” solution designed to preserve state services, but couldn’t accept a tax increase so Michigan business can pay less.

“We are definitely not willing to have this budget balanced on the backs of seniors and we’re surely not willing to have a major tax cut to business financed on the backs of seniors,” said Eric Schneidewind, president of AARP Michigan.

Calley said revenue from the income tax changes that would have some seniors paying more pays for a less onerous business tax he said would attract critical investment that would provide jobs for their grandchildren.

“This overall proposal is really about the future in creating an environment of opportunity and prosperity for the kids who are about to inherit Michigan,” Calley said.

Michigan State University economist Charles Ballard said: “I expect there will be opposition to removing the privileged treatment of retirement income. But I hope the public will also hear from those who think fixing this inequity in the tax system is long overdue.”

Snyder’s plan to eliminate the additional $2,300 exemption seniors can claim and the $600 per child deduction parents can take isn’t likely to please Democrats. Republicans may not like fixing the income tax rate at 4.25 percent, which would eventually save about $500 million annually,

AARP Michigan and other groups Wednesday criticized any notion of eliminating the Michigan Earned Income Tax Credit, a $370 million program that offers an average $432 refund to some 800,000 low-income wage earners. Snyder officials haven’t publicly revealed their plans for the credit.

Tom Hickson of the Michigan Catholic Conference called it a “tax hike on the working poor.”

Some Republicans like Sen. Jack Brandenburg, R-Harrison Township, chairman of the Senate Finance Committee, would eliminate the MIETC, but expressed opposition to taxing the retirement income his Macomb County constituents, many of whom have auto industry pensions.
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But Sen. Roger Kahn, R-Saginaw Township, said if Snyder’s plan is to move as a package, lawmakers are going to have park their objections to individual pieces in it at the door.

“If everybody is putting something into the pot, there’s an overall fairness to it,” he said
 

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I knew I shouldn't have voted for that Michigan governor!!!:laughing:
 

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Where's the promised GOP pledge to reduce govt spending?
I know it's hard to see things that are right in front of your face but I'm not surprised you didn't know this. Perhaps you expected more cuts and even more pain?


Snyder's $46 billion budget calls for $1.2 billion in spending cuts. Schools, universities and local governments will see less state aid.

The sacrifice also includes elimination of 300 Department of Human Services jobs, closing a prison, Michigan State Police posts, and $180 million in concessions from state employees
http://www.thetimesherald.com/artic...s/Snyder-plan-painful-needed?odyssey=nav|head
 

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oh didnt you know reducing spending just means you will have to increase spending to make up for it?
 

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I don't live anywhere near that dump but I was able to find those cuts in 10 seconds......
Yes but you were looking for the real news. Not selective tailored to fit your opinion.:thumbsup:
 
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