October 6, 2014

Democratic Representatives Call for Retirement Tax Repeal

Seniors say Republican tax increases hurt them

LANSING — State Representatives Theresa Abed (D-Grand Ledge) and Tom Cochran (D-Mason) joined with state Rep. Andy Schor (D-Lansing) and senior citizens at a press conference today to highlight the Democratic plan to repeal Republican tax increases that have hurt Michigan’s middle-class seniors.

“This tax on senior retirement income has made life more difficult for many retirees who are struggling just to make ends meet,” said Abed. “It’s an unfair tax that affects those on a fixed income who are unable to make up the difference in this monetary burden.”

House Republican changes to Michigan’s tax code since 2011 have punished seniors with new taxes on retirement income, a reduction in the Homestead Property Tax Credit, the elimination of the senior income exemption and phased out the senior investment deduction based on age.

Since the tax on retirement income took effect in 2012, and seniors around Michigan have watched their retirement checks shrink and must now get by with less money to spend on food, prescriptions and housing. Abed’s House Bill 4564 would repeal the tax. It was introduced in 2013, but House Republicans have repeatedly blocked its consideration.

“After my wife and I retired, we were both diagnosed with cancer,” said Mark Smith of Grand Ledge. “While we did take extra steps to plan for a comfortable retirement, we faced extensive health care deductibles and prescription drug co-pays.”

His wife, Bonnie, continued, “We saved and planned for our retirement, and now all of a sudden we are hit with the extra burden of an unfair tax equal to a monthly car payment. At the end of the day, it makes retirement scary when it should be enjoyable.”

“Seniors living on a fixed income already faced enough challenges paying their bills before Republicans raised their taxes,” said Cochran. “I will keep fighting to protect our seniors by advocating for the repeal of the unfair senior retirement tax.”

“The Republican-passed pension tax created uncertainty for Michigan seniors now forced to pay taxes on the money they set aside for retirement,” said Schor. “They had set budgets to live on, and this unexpected law blew away those budgets. When I’m talking to my constituents, I often hear from people who have $100 to $200 less per month due to this unfair tax. They can’t earn more money, so they have to decide what to cut out – prescription drugs, food or other necessities. This law needs to be repealed.”


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