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Democrats call for repealing Michigan's pension tax

Steve Carmody
Michigan Radio

State House Democrats are once again calling for a repeal of Michigan’s tax on pensions.

The 2011 tax code rewrite means some retirees are paying taxes on previously untaxed pension income.

State Rep. Theresa Abed, D-Grand Ledge, says it’s unfair to seniors.

“It is wrong to balance the budget on the backs of those on a fixed income with no way to make it up,” says Abed.

The pension tax is expected to generate about $350 million this year.

A bill to repeal the pension tax has been languishing in the Legislature since 2013.

State Rep. Andy Schor, D-Lansing, says there is enough support in the Legislature to repeal the pension tax.

“We have people on both sides of the aisle who want to repeal this, but the Republicans won’t take it up. They won’t do it,” says Schor. “Next year when we come back and we’re in the majority, we’ll do it.”

A Republican spokesman says the tax code rewrite treats all retirees “more fairly”  by treating pension and 401 (k) income equally.

“The reality is that Michigan’s tax reform we undertook brought more fairness to all Michiganders,” says Ari Adler, a spokesman for State House Speaker Jase Bolger, “so that neighbors living on the same street weren’t paying different income taxes just because of their age or source of income.”

Steve Carmody has been a reporter for Michigan Public since 2005. Steve previously worked at public radio and television stations in Florida, Oklahoma and Kentucky, and also has extensive experience in commercial broadcasting.