Republican Gov. Rick Snyder is drawing recall threats and angry protests over his attempt to do what no Michigan governor has tried in more than 40 years: Tax the pension and 401(k) incomes of millions of retirees.
The move has brought demonstrators to the Capitol and has thousands of seniors reminding the new governor that they could make re-election difficult for him and lawmakers who go along. Democrats oppose the move, and even some GOP lawmakers are casting about for an alternative to avoid raising taxes on a powerful interest group.
Snyder remains undeterred. The multimillionaire former Gateway
computer executive says Michigan _ which has some of the nation's
most generous senior tax breaks_ can't afford the $900 million it
loses because of them, and that retirees need to pay their share
rather than pushing the burden onto younger residents.
Arnold Eick, a 73-year-old former General Motors manager, says
he needs those tax breaks to stay afloat. Like many retirees, he's
incensed that he and the working poor who would lose a tax credit
are being asked to pay more so Snyder can reduce business
taxes.
"I just can't understand how anybody can be that unfair, that
evil, to take from the poor and give to the rich," Eick said.
Michigan currently charges no income tax on public pensions and
exempts up to $45,120 worth of income from private pensions,
401(k)s and IRAs for an individual retiree, with limits of twice
that for a retired couple. Treasury figures show about a fifth of
the tax returns filed each year include pension income.
Eick says his out-of-pocket health expenses hit $27,000 over a
three-year period because GM took away health care for salaried
retirees. If the pension exemption also ends, the Flushing resident
estimates he and his wife may owe $3,000 in annual income tax _
something he says could make meeting his mortgage payment
impossible.
"We're going to have to leave our home," he said while carrying
a sign promising retribution. "I'm old but I can recall two
things," it said. "1. Tax refunds. 2. You."
Snyder campaigned last year on a promise to replace the complex
and unpopular Michigan Business Tax with a 6 percent corporate
income tax, a move that would eliminate $1.7 billion in revenue.
But he didn't reveal until last month that he wanted to pay for it
by requiring more money from individual taxpayers.
Via http://www.bismarcktribune.com/news/national/article_645d7273-7599-580c-b015-26b8cd4ee7a9.html
