Pension tax proposal

From James R. Echols, Wolverine Lake:

I am a retiree residing in the state of Michigan. Before my retirement, I served as a federal law enforcement officer for almost 30 years. I paid Michigan income taxes for my 40 years of total employment in the state of Michigan. I still pay property taxes, sales taxes, use taxes, gas taxes and any other taxes passed on by businesses to me.

The timing of my retirement was based, in part, upon my calculation of the available take-home pay I would have from my federal pension with its exemption from Michigan personal income taxes. Furthermore, I decided to remain in Michigan instead of relocating elsewhere due, in no small measure, to this income tax exemption vis-a-vis my pension. Changing the rules now would cause me undue financial hardship — especially since I was born after 1952 and my pension will be taxed in its full amount under the governor’s plans.

However, today I read with growing consternation your newspaper’s support of Gov. (Rick) Snyder’s plans to tax senior pensions (“A tough pill to swallow, but pension tax proposal brings revenues, parity to Michigan,” April 20). I began by reading your insightful analysis regarding how Michigan came to be in such a financial mess. Let me say this: If the governor’s plans included taxing my pension to help alleviate the state’s financial crisis (as you state in your article), I might be persuaded to have a portion of my pension taxed (although I still would have reservations about why I, as an individual who managed his finances in a responsible manner, must now be forced to help bail out a state that could not responsibly handle its finances). Unlike the state, I live within my budget. And, further unlike the state, I cannot just snap my fingers to make up my revenue shortfall when their proposed taxation of my pension throws my budget out of whack.

However, and here is where my frustration with your editorial mounted, the governor does not plan on using the revenues from retiree pensions to help with the state budget crises. Instead, his proposal is to use this revenue to help fund a $1.7 billion tax cut to businesses. A tax cut wherein it is unclear whether the result would be job creation or the lining of corporate pockets, which, I would argue, is the more likely result.

It is interesting to note that while it is convenient for Republicans to talk a good game about being opposed to higher taxes and/or new taxes, when the rubber meets the road it is the state’s Democrats who have been vocal in their opposition to this arbitrary and unfair tax increase.