Seniors irate over Snyder budget plan

Gov. Rick Snyder’s plan to “broaden the base of taxpayers by including those earning private and public pensions” is provoking outrage among seniors who have long enjoyed the most generous tax breaks in the nation.

In the budget presented yesterday Snyder said that pensions — but not Social Security — should be subject to a 4.25 percent state income tax.

“This budget, in effect, declares war on senior citizens,” AARP Michigan President Eric Schneidewind told the Detroit Free Press. “We get higher taxes and worse services.”

Columnist Jack Lessenberry writes that some voters have gone “ballistic” over budget details.

Seniors were especially incensed about the idea of taxing pensions. “We will be leaving the state as soon as possible if this tax goes into effect,” Lawrence Gibson of Charlotte wrote to me. Well, he will have a very limited choice of locales.

The only other states with income taxes that don’t tax pension income are Alabama, Mississippi and Pennsylvania. Even those who disagree sharply with the governor are wrong to be outraged. Unlike many politicians, he did what he said he would.

The Associated Press runs down the tax benefits currently available for seniors:

–Michigan exempts all Social Security and public pension benefits from income taxes, as well as up to $45,120 a year for a single return and $90,240 on a joint return in private retirement and pension benefits, a cap that increases annually with inflation.
–Taxpayers ages 65 or older also get to deduct up to $10,058 on a single return or $20,115 on a joint return in interest, dividends and capital gains. The deduction is reduced by any deduction for retirement and pension benefits.
–Those 65 and over get the regular $3,600-per-person exemption on their state income taxes as well as a $2,300 special exemption just for seniors.
–Seniors can claim a larger proportion of their property taxes in figuring their homestead property tax credit on their income taxes.