Monday, April 18, 2011

Snyder's Pension Tax Deal Isn't About Fairness

Did Rick Snyder finally find some compassion for Michigan senior citizens and decide to modify his cruel tax on pensions?

No, he didn't. Somebody just explained the politics of it to him.

Originally, Snyder wanted to tax all pensions in Michigan in order to fund the $1.8 billion tax cut to Michigan businesses. Michigan senior citizens let him know what they think of that, (hint, in case you haven't been paying attention: they hated it) and they probably let their state senators and state representatives know that, too.

So Republican legislative leaders came up with a compromise. People age 67 and over won't have their pensions taxed. People 60 to 66 will get a $20,000 a year exemption ($40,000 for a couple), and people under 60 will still be screwed.

So why is it fair that people under 60 will pay the full tax and the others will get full or partial exemptions? There is no explanation for that. People under 60 are likely to have hefty bills after being forced into early retirement, years before they expected to have to retire. They may even still have children at home or in college, mortgages and car payments they were expecting to pay off in their last years of working while they added to their nest eggs. Instead, they got shoved out the door early by their employer, who calculated that their pensions would be tax free in telling them what they would have to live on. Now Snyder has pulled the rug out from under them.

So why stick it to some retirees and not others? Let's see, what age group comprises the most reliable voters? Wouldn't that be senior citizens? Of those between 65 and 75 registered to vote, 78.1 percent voted in 2008, according to the U.S. Census. And 76.6 percent of those 75 and over. Of those 55 to 64. it was still 76.6 percent.

So my exempting entirely those 67 and over, Snyder is mollifying a big chunk of those most likely to vote. The exemption for the middle group amounts to throwing them a bone and assuming they won't get too upset because in a year or two they will be 67 and home free.

And the younger retirees, well, the divide and conquer calculation was that there weren't that many of them to worry about at the ballot box.

In other words, fairness had nothing to do with it. It was all political calculation.


1 comment:

Labrador Blue Dog said...

And isn't it a violation of the 14th Amendment to tax some people more than other people for the same type of income? Seems some people are more equal than others.