Michigan Votes Forum

Introduced in the House on May 17, 2007

Click here to view bill details.

My pension is only two thirds of what it should be because of illegal promotions (nepotism). It has been further reduced by increased amounts taken for health care, a 119% increase from $75 per month to $164.31 per month. Now it will be further reduced by a proposed 4.6% Income Tax. I'm subject to the Winfall Elimination Provision so my Social Security has been reduced to 40% from my second job of 25 years, (I couldn't make enough from the first job to support my family.) The politicians won't quit until they have it all! I guess that people on fixed incomes are an easy target. If its not gas prices its the idiots in Lansing.

This is another obscene way of sticking it to people who have spent careers working hard and loyally for public agencies, in anticipation of enjoying a modestly comfortable retirement. Broken promises are immoral.

Sticking it to people who don't work for the government is just fine with you, but when they start coming after your money, it's time to start crying about it? You can bet that my non-government 401K plan will be taxed when I start withdrawing money from it, why should your retirment savings be any different?

You know from the git-go that your 401K proceeds were going to be taxed. That was the deal you made. That was your choice. Live with it. People who went into public service jobs made a different choice, received a different promise and labored under a different expectation. The one under discussion here was that their Michigan government pensions were not going to be subject to Michigan income tax. Now comes proposed legislation that would unilaterally void that promise. That is not just stinko, it also is immoral by any ordinary measure. I am not a public employee, so I don't have a pension at stake here. But as a taxpaying citizen and voter in the State of Michigan, I am a serious stakeholder in the government enterprises that has many employees who would be affected by this legislation. I wish to see them treated in the same way I wish to be treated -- promise made, promise kept. My posture reflects mainstream moral values, unless our society has totally abandoned what long has been known as The Golden Rule.

Chris Ward you are taking a very tough stand. Kudos for your effort, I wonder if we will ever find the answer. Would this legislation include all police, fire and the like. One thing I have noticed about the pensions you are referring to is when Social Security begins the pensions are not adjusted. One would think all this money would be good for our economy? If Michigan should tax these pensions would Michigan residents with these pensions who choose to leave be taxed also in the same manner in the state of destination? Thank You

You guys who don't have the guts to put your name on your comments wouldn't last ten minutes in a scout car. "Mr. Kudos" why don't you look up the Winfall Elimination Provision before you make a complete fool of your self. I've paid both the employer half and the employee half of the Social Security Tax for 25 years and will have my benefit reduced to 40%. I would call that a reduction. I guess that's so they can give it to illegal aliens.

"I wish to see them treated in the same way I wish to be treated -- promise made, promise kept." Except when someone else made that promise to lift my wallet and pick my neighbors' pockets to keep the state employees satiated. Knuckleheads: it's not your money, and we can't afford you anymore besides. Good grief, the entitlement mentality in this thread is thick enough to require chain saws. No wonder we're circling the bowl. "The Golden Rule." Fleece unfrom the Taxpayer as you would have the Taxpayer Fleece unfrom you. (or better yet, don't take what's not yours to take.)

A supporter of this bill rages: “Knuckleheads: it's not your money, and we can't afford you anymore besides.” Well, that's absoluterly wrong. Here’s the truth. Pensions received by retired government employees ARE THEIR MONEY. They've earned it, fair and square, in the good old-fashion way – by working for it and fulfilling their part of the employment agreement. Part of the deal that Michigan government employees made with their employer – that is, us, the citizens of this state -- was that the State of Michigan would not levy an income tax on their pensions. That was a promise. That was the understanding, mutually agreed upon. That was the contract. Now we have some joker in the legislature proposing to back out of that deal, unilaterally, and effectively reduce the level of compensation that retirees were promised. That would not be morally or ethically right if done by an employer in the private sector. It certainly is not a moral or right thing to do by an employer in the public sector, either. The bill supporter further rants: “Good grief, the entitlement mentality in this thread is thick enough to require chain saws. No wonder we're circling the bowl.” The “entitlement mentality” raged about here is merely an expectation that our state government will honor its end of the pension agreement made with public employees. The underlying point is that the pension and its ancillary benefits, which include relief from the State income tax levy on these pensions, are not gifts, but earned benefits – compensation promised for work performed. The real "entitlement mentality" being expressed here lies in the idea that the State is somehow "entitled" to unilaterally back out of a promise it made to public employment pensioners. If we are “circling the bowl” as the writer claims, the real reason is today’s evident disregard for the age-old concept that promises are to be kept, and not discarded unilaterally when they become in some way inconvenient. The supporter of this bill chooses to characterize "The Golden Rule" as: “Fleece unfrom the Taxpayer as you would have the Taxpayer Fleece unfrom you. (or better yet, don't take what's not yours to take.)” The first part of that is gibberish, but the part in parentheses is a correct interpretation of the Golden Rule as most of us know it: Do unto others as you would have them do unto you. In this case, the pension income tax relief belongs to the pensioners who have earned it. To deprive them of their due would be to violate the Golden Rule.

some form of HONESTY AND INTEGRITY from our legislators. this is your FIRST mistake. the second mistake is to take any legislator's promise as anything but air conditioning. they are broken constantly. we were promised a better state by the governor five years ago, and look what we have now. a state that cannot afford to keep prisoners, so they have to let them go. a state that cannot afford to pay police officers, so they have to let them go too. a state that tries to correct it's mistakes by TAXING THOSE THAT WORKED FOR IT FOR YEARS. promises made by a michigan politician are ALREADY BROKEN before they pass his teeth.

... is not a strong point of government. Pensions became untaxable in response to a case where Michigan tried to tax a federal pension in 1988, I believe. They lost and then decided to let state & local pensions be exempt as well. Private pensions became exempt shortly thereafter. The Michigan personal income tax came in as an "emergency measure" to a budget shortfall in 1966. It's been here ever since. Social Security Numbers weren't supposed to be used as a national id. Almost every tax proposed is done as a temporary tax. After enough time, it becomes permanent. Someone said if we gave her five years, we'd be blown away. I assumed that blown away referred to the economic growth she'd bring and not to the cash in my wallet. "Read my lips. No new taxes." Tax increase denied Bush Sr. a second term. Don't expect them to keep their promises. You won't be disappointed.

If you draw from your 401-K as a pension, it is not taxed.

It always gets fun to watch the fireworks when the state-paid loafers are threatened with the same pinch that those of not seated in the government la-Z-boy *have been actually been feeling* for several years now. Mixing metaphors now, let's plug our nose, don the rubber gloves, and try to sort a few choice nuggets out of this mess... "That was the contract." Show me the actual written and legally-enforceable contract where "we" signed up for your special perpetual tax-free pension on top of an already-inflated salary and lax performance expectations (don't huff; it's common knowledge). If you have one, stop frittering away your boss' time posting on the internet, and get down to the courthouse to enforce it. But there's actually no contract. "would not be morally or ethically right" This steamer is studded with (incorrect) appeals to morals and ethics. Well, here's a valid one: It is immoral and unethical for you to loot your neighbors' wallets at gunpoint, against their will. Excepting those few who have personally signed written contracts with you to do so, but those people don't really exist. "If we are “circling the bowl” as the writer claims, the real reason is today’s evident disregard for the age-old concept that promises are to be kept, and not discarded unilaterally when they become in some way inconvenient." Promises, shmomishes. Don't believe every "promise" dangled before you on a fishhook, especially when the promise is an unmaintainable pyramid scheme (if you're referring to the auto companies' legacy costs. That wouldn't be "sustainable", as the neo-socialists like to say.) Or especially when you "serve the public". If "we" are indeed the state, as you claim, then "we" will simply declare sovereign immunity and void your "contract" anyway. Not from spite (well, mostly not), but since we can no longer afford you. And because we're the almighty State. But there's not really any contract, and *we* (the actual people you would fleece) have promised you nothing. "the pension income tax relief belongs to the pensioners" Missed by a lightyear. Where to start.... First, possession is nine-tenths--until it's in the bank, don't believe you'll get it (not justification, just common sense.) Furthermore, it's not really your money until you've done the work. Your employer (the state, or as you claim, "us") can renegotiate future payment for future work any time. Unless there's a mutually-agreeable written and legally-enforceable contract forbidding it (there's not, and even if there was, it would be missing my signature). Finally, it's not "your" job--it's *the state's* job, and they let you fill it for a while. Be thankful they've (we've) let you loaf along for as long as they (we) have. Finally, what makes you so special? Would you be willing to let those of us not reclining in the gubmint easy-chair have tax-free pensions too? Probably not, for obvious reasons. "The first part of that is mere clever wordsmithing on the surface but quite profound insight on a deeper level, and really hit me in the pit of the stomach and got me to think about what a pig the taxpayers must think of me, but the part in parentheses is a correct interpretation" I fixed that last one for you (no need to dwell on the rest--already been dealt with.) By the way, for all of your bluster, you forgot to address this part: "and we can't afford you anymore besides.” Unless you can present us with your plan to make yourself more affordable to the state (to us) in these tough economic times, then we're putting you up on ebay (no reserve!). Good riddance.

Just send all your money to Lansing!

Reported out of committee with a recommendation to pass... Now we get to find out how many of our legislators have thrown their moral compass out the window and will vote to balance the bloated State budget on the backs of retirees and people on fixed incomes! The irony is that these same people will one day be retired and will suddenly realize they've shot themselves in the foot.

Seriously? Budget Balancing on the backs of all the poor and retired? Have you read through the bills? Your pension will still be fully deductable up to $81,840 for a maried filer and $40,920 for a single filer...and the deductable amount will go up each year with inflation. If your pension is more than that I think you can afford to pay taxes on the difference. The real poor of the state will thank you when the extra money can be put to use providing them with essential services like food and health care.

It's too bad the "govenor" doesn't feel the pain of her own decisions....she continuously drives the state into depression and when she's done living in our mansion....she'll run back to Canada and retire at our expense---it's a shame