Pensioners 'mugged'

From Michael McPhee, White Lake Township:

Gov. Rick Snyder wants to shift the tax burden away from business by making pensions taxable. He says household incomes under $40,000 won’t be affected, but that seems dubious. Fewer companies offer their workers a pension these days and the trend will only get worse. Eventually, falling revenue will force a tax on all pensions, regardless of income. Still, revenue will dwindle and other sources will be tapped. With a taboo on pensions already broken, perhaps Social Security benefits will be taxed next, or the sales tax raised instead.

Today, virtually every state faces a budget crisis. Even states like Texas are in trouble despite being business-friendly. States that already tax pensions are hurting, too. So the prospect of taxing pensions to make ourselves more business-friendly may not make any difference at all. Although we may attract a few companies to relocate or expand here, there’s no guarantee that they’ll offer their employees decent wages or a pension to tax in retirement. Meanwhile, retirees may decide that Florida is a better option if pensions get taxed here. And yet, Gov. Snyder only worries about our youth leaving the state. With this new tax, Snyder practically shows our retirees the door out and oddly, there’s no outrage from the Tea Part now that Republicans seek this new tax.

We’re turning down the wrong path. Pensioners, whose income is fixed, get mugged along the way to keep things going until the day “new business” shows up bearing us gifts and singing the state anthem. But while we await deliverance, the exodus of business and jobs overseas will continue, thanks to NAFTA (North American Free Trade Agreement) and cheap foreign labor. In that sense, our debate over tax reform in Michigan seems like a scuffle over deck chairs on the Titanic. Shouldn’t our trade policies be reformed first?