State Rep. Joe Bellino’s proposal to repeal Michigan’s pension tax was approved today by a House committee, a key step toward eliminating a financial hardship on seniors adopted in 2011.

“It’s the right time to do the right thing for our senior citizens,” said Bellino, of Monroe, after the House Tax Policy Committee advanced his proposal. “Back in 2011, the rules were changed on people getting ready for retirement. Michigan took two cards out of the deck and shorted them. It wasn’t right, it wasn’t fair – and I’m excited to make progress on setting things straight.”

Bellino’s plan – introduced on the first day of the new legislative session – would eliminate the pension tax approved in 2011, re-establishing 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.

Bellino’s proposal also would eliminate Michigan’s current, complex three-tiered retirement tax structure – which now has different rules for taxpayers depending on what year they were born.

Bellino said Michigan’s economy and state budget both have improved dramatically since the pension tax was adopted.

“The time is absolutely right for a change,” Bellino said. “I am optimistic we can all come together and bring seniors the tax relief they deserve and need after decades of working hard to make Michigan a great place to live.”

The legislation – House Bill 4006 – advances to the House Ways and Means Committee for further consideration.

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