State Rep. Bronna Kahle today said she supports a new plan to repeal Michigan’s pension tax.
The proposal – introduced at the start of the Legislature’s 2019-20 session – would eliminate the pension tax that was first charged in 2012.
“It’s time to repeal Michigan’s controversial pension tax,” Kahle said. “As the former director of the Adrian Senior Center, I know how difficult it can be for senior citizens on fixed incomes to make ends meet. The bill introduced this week will allow seniors to keep more of their own money. This will help older adults on fixed incomes buy groceries and medication, pay utility bills and take care of other necessities.”
The proposal would re-establish Michigan’s previous retirement tax structure. Public pensions would be exempt from taxation and other retirement income would have higher deductibles for state income taxes. Social Security income would continue to be exempt.
The plan also would eliminate Michigan’s current and confusing three-tiered retirement tax structure – which now has different rules for taxpayers depending on what year they were born.
“We need to stand up for our older adults,” Kahle said. “They worked for decades and made plans based on the expectation their pension income would not be taxed. It wasn’t right to change the rules. It’s time to do the right thing and eliminate the pension tax.”
The legislation: House Bill 4006.