March 27, 2011
Gov. Rick Snyder has taken bold steps to provide a balanced
proposes simplifying the
rightfully includes taxing retirees’ pension income. This income has long been
exempt for the most part, currently up to $45,120, double that for couples. While
it is a wonderful benefit not to pay
Snyder proposed eliminating the Earned Income tax Credit in
“The Tax Foundation ranks the MBT as the 48th worst business
tax in the country. But it rates
The Governor touts his support of K-12 and higher education, but his support means a reduction of about $300 per pupil on top of a $170 reduction this year. 6 A good education is necessary not only for good citizens but for a pool of workers for business. While the Governor says he will propose a comprehensive plan for education, reducing per pupil funding does not appear to be a good start.
I propose the state personal income tax be frozen at the current rate of 4.35%. This would increase revenue by $200 million over Snyder’s proposal. Proposal A passed in 1994 turned over local school property taxes for operation to the state. The purpose was to equalize funding around the state. This has clearly failed and I propose Proposal A be rescinded. I also propose that the 500+ school districts be reduced through consolidation on a county level. Transportation and technology makes this reorganization very feasible and fiscally responsible.
I propose the corporate tax rate be at least enough to equal the current revenue generated from businesses. They benefit from government services as much, if not more than individuals. My estimates indicate a tax rate of 16%.
I give Gov. Snyder high marks for his proposals, but I hope that he will be open to compromises. The false mantra of “cutting taxes” to provide jobs has got to end. My recommendations provide for more fairness while still holding on to a budget of “shared sacrifice”.
2 Susan Tompor, ‘Tax credit faces cut”, Detroit Free Press, 12:13 AM, Mar. 6, 2011, http://www.freep.com/article/20110306/COL07/103060405/0/HSS/Susan-
See also Michigan Department of Treasury Annual Report 2009
Michigan Gov. Rick Snyder presents $45B budget, Feb 17, 2011 |
5 Norbert Bufka, It is time to end welfare for the rich and super rich!, October 2009http://www.thisonly.org/Articles/End%20welfare%20for%20the%20rich%20October%202009.htm
Sunday, March 27, 2011 11:24 AM
So the folks who are locked into a fixed income from a pension obtained over decades of work are now going to be TAXED over again. Your article makes me puke. Many people are on meager pensions that don't have inflation colas. Your article threw them under the bus. No way in hell I am paying for another 1.4 bil dollar tax cut for corporate friends of Snyder. Moving out of your crummy fascist state.
Thanks for writing.
This may surprise you but I agree with you completely. After I wrote that column two weeks ago I had some good discussions with people about low fixed income pensions. These should not be taxed! The taxes should also not be used to finance a big cut in business taxes. I said that in the column.
What is needed and I did not say it is a higher exemption than $3700 per person. If this is high enough then that would solve your concern, I think.
I am puzzled by your use of the word “fascist” in regard to my column. or was it about Snyder’s plans?
Sent: Sunday, March 27, 2011 7:44 PM
I apologize for using the term fascist. It surely wasnt meant to link you to that time in history. I do feel a sort of power grab being exercised by our new governor. I think the e.m.f issue is a power grab and a back door method of dismantling collective bargaining. I think a fairer approach to balancing the budget is a
A in sales tax on services which aren't taxed. A more progressive state income tax and or an increase in corporate income tax to say 7.0 percent. The problem here is his robust business tax cuts 1.4 bil being financed by new taxes on pensions and elimination of EIC for working poor. This is a targeted attack on seniors and working poor. Snyder last position is NO compromise. Hence when the recall petition is initiated. I will be more than happy to see him recalled. The movement is gaining momentum. Thanks for your reply and best regards.
We are in more agreement than disagreement. Apology accepted.
I like your idea of a progressive tax but a sales tax bothers me a little.
Sent: Sunday, March 27, 2011 3:29 PM
I must say I agree with some of your ideas about fixing
However as a fellow retiree I find it irresponsible for you to suggest that all retirees should now have their retirement income taxed.
Certainly there are a handful of retirees drawing large pensions but for every one of them there are 20 or more trying to figure out
how to make ends meet on their so called fixed income as energy and food cost run rampant. It wasn't bad enough that Snyder proposed eliminating the tax fee status of retirement accounts he also proposed eliminating the over 65 extra exemption and reducing the property tax credit. While then taking that money and the EIC money and handling that back to business.
I am a retiree drawing a very modest state pension that keeps shrinking as my share of medical insurance rises, my home value has fallen yet the property taxes have remained as they were. My extra retirement account lost much of it's value due to the bad business and banking practices of men like Mr. Snyder. I was promised a tax free retirement when the state took control of my pension fund years ago, I have earned and hope I get to keep it, so I can finish what is left of my time on earth with a little modest dignity.
So please don't get on your soapbox and speak for all of us retirees as some of us, are struggling and losing $100 month to taxes would not mean giving up a luxuries it would mean deciding we will have heat or food.
Sorry, Norbert but like Snyder just because you feel something or someway about an idea it does not mean it is RIGHT.
Mr. Snyder has not proposed shared sacrifice, he has proposed taking from the elderly and poor for the benefit of the business community, you did not propose that but to those in his corner you have added some degree of justification for his plan.
Thanks for taking the time to reply. I had some more conversations with retiree friends and agree with you about taxing low pensions is a bad idea. So perhaps the better solution would be to lower the exempt threshold from $45,120 single (double for couples) to around $10,000 single and $40,000 couple. Would that work?
(Note: I goofed. I meant $20,000 for couple in the above line.)
There is a lot to be concerned about in his budget but I thought I could work at a compromise and hope he will too. Time will tell. Another respondent is urging a recall of Snyder.
Not sure how you arrived at 10K and 40K for couples that seems a bit unfair, how about 20K single 40K couples.
But thanks for replying so promptly, I really do not think Rick Snyder understands at all the difficulties the poor and elderly face in this current economic situation. He is single minded in his drive to make this a mecca for business, even though the reality of his plan will be negative on Michigan as whole in both the short and long term, it is simply to simplistic to work.
Sure. I can go with that.
In my column I was just trying to give him a break since he is new, but I tghink your assessmentis correct. He ahs already latched onto the Republican mantra of lower taxes for business as if they create jobs, and studies have shown they do not.
Sent: Sunday, March 27, 2011 9:04 PM
Norb . . . I agree whole heartedly with your proposals. Like you, I am not taxed on my pension and
while I do not relish the idea of starting to be taxed, it is only fair, as you
say. Proposal A has outlived its
usefulness and is grossly unfair to rural districts. A child in Bad Axe or
Thanks. I had two other emails today from new people blasting me for supporting taxing pensions.
March 28, 2011
I will be the first to admit that I don't like the tax and I don't want it, but fair is fair. I was surprised that you gave as much support to the Nerd's plan as you did. Remember, I am not affiliatied with either party, but I thought your "democratness" (is that a word?) would have put you in direct opposition. It is refreshing, and I mean this, to see a "democrat" say something positive about a republican. Now, if we could just get it to work in reverse.
The Nerd has created a terrible weapon with his ability to appoint a manager. It will be very interesting to see him use it. When he does, he had better be very careful with it and he had better appoint a very, very good person.
Thanks. It was a deliberate attempt on my part to reach across the aisle. I too hope our legislators will do that so we can move forward.
I too am concerned about the manager law, especially with the ability to end contracts. One of the contracts that should be ended is lifetime health insurance for legislators who have served only six years – starting at age 55. I may write about this in my May column.
Sent: Monday, March 28, 2011 11:18 AM
I’d like you to consider: You stated “He
also avoided the disastrous anti-collective bargaining proposal that Gov. Scott
Walker in our neighboring state of
Snyder talks a good game,
but at the end of the day, he’s in bed with the
Thanks. I really appreciate your perspective. I too am concerned about that emergency manager plan. I was surprised it passed so quickly and easily.
Sent: Sunday, March 27, 2011 10:13 PM
Norbert: I read the
piece on-line this morning. I think you
are too much the gentle soul. The MDN
takes advantage of you, and not merely in their headline writing. The proposals promoted by a number of
Snyder's Republican colleagues in the Legislature, taken together, are of the
same effect as
It is not productive, in my view to let an argument take the form of "high marks but hope for compromise." The other side will simply take the high marks and run leaving you with the shadow of hope. The large majority of readers of the paper will read the headlines and skip the rest while a few more will read the first few sentences before going elsewhere and very few will read the entirety, thus the strength of your argument is lost in the ending paragraphs. Reading other editorials in the local paper suggest strongly that the editors are deficient in both reasoning power and good intentions. Their choice of headline makes my case, I think? Yet another reason I am considering submitting my "stuff" elsewhere.
All in all, a good try but. . . .? Maybe more spleen and less good will? More data and analysis would be welcome, too. As Sherlock Holmes said: Clay, Watson, I must have clay. One cannot make bricks without clay!" (paraphrase?)
Thanks. I really appreciate and value your opinions. I purposely tried to be open because there are so many who are not. Who is going to offer the olive branch inthis polarized environment? If no one does, where will we end up?
I wrote the headline by the way so you can't blame the MDN for this one.
understand your motives. Still the
headline may not have been best. We
would do well to remember that we cannot negotiate with extremists and every
concession made in overture will simply be taken and nothing offered in return. Only when they realize that their extremism
is self-destructive are they likely to find an ability
to compromise. A
lesson that some in
Sent: Monday, March 28, 2011 11:58 AM
First of all, the headline the MDN chose for your article is quite misleading. It implies that you favor the budget...and in fact, the way I read it is that you favor the idea of putting forth a two-year budget...very different things.
I am with you, now that I am retired, of enjoying a tax-free pension, but I also think it is unfair. However, I think it needs to be gradually phased in. Not everything has a nest egg to fall back on when taxes increase and especially for some of our older citizens, this may prove to be a hardship.
The idea that giving the business tax breaks will help is crazy, as your article explains. But somehow, many people still buy that idea. It is Reagan's trickle down economics... the magical thinking that business has a heart. What it has is a bottom line.
Norbert, I am so outraged at what has happened to the tax structure...when we see GE paying NO taxes and getting money back from the government...Did you see 60 Minutes yesterday about the companies going to low tax country\ies...I'm trying to stay calm, but what is happening to my country?
Isn't it unthinkable that teachers are now the wealthy greedy people who are causing our financial woes?
All right. I'm going to take a deep breath and stay calm!
Thanks for all that you do.
Excellent comments, especially the one about phasing in the taxation of pensions.
I too am outraged by the tax policy in this country. My blood boils more when I think that Dave Camp is going to try to revamp the tax code. That’s like the proverbial fox garding the hen house!
By the way I wrote the headline as an effort to be conciliatory in this polarized environment.
Well, don't write that kind of headline any more!!! I
often think the liberals have bent over so far backwards we're falling off the
Sent: Monday, March 28, 2011 9:05 PM
Norb. I thought your last column was very good. I like how you started on a positive note re: Gov Snyder, gave good statistics and info, challenging some things, affirming others and how you gave several proposals and ended on a positive note as well as a challenge about fairness and “shared sacrifice” .
Sent: Monday, March 28, 2011 9:26 PM
I was glad to see your article in the paper.... That always makes us happy, as you have such a balanced view.
I don't know what to think about this whole tax mess.... But I do know that I don't think it is right to balance the budget on the backs of the poor.
I wasn't sure if
you were against the EIC.... I think that is what you meant. I threw out an
article yesterday - I think from the Catholic Weekly, which indicated that half
of the children in
60 minutes had an
excellent piece on child poverty in the
Seems we have to find a way to stop stockholders and corporations from expecting bigger and bigger gains each year - more and more "growth" for the upper class....
And of course, last night, 60 minutes had and excellent piece on Tax Havens - offshore - The CEO of a big corporation said that the US is losing money because we tax them too much, and we'll lose more and more, because other countries "see the light"..... Well, it seems to me that they want to do business here.... They want to use our infrastructure and our employees and to have our population buy their wares..... But they think poor old them have to pay too much - or they say their stockholders claim it is too much....
As to pensions being taxed.... Well, some people have figured out their life, based on what was set up for them..... Now, they are being told that it has changed.... I could see if the law said that people who are starting out will have to pay (not that any of them will get pensions....) But for some, this is a drastic mid-stream change that will take a lot from their thin savings - along with higher and higher medical care costs, gas costs, food prices....etc. Their pensions are pretty much set.... And then social security is also threatened.....
So, lots to think
about. I can't believe that we plan to
cut education and basically make
Basically, I still believe that we could build the economy with renewable energy and that we would grow.... But the Rep. are trying to first gut all of the "old social programs" and any power that they can squash.
Thanks for putting yourself on the line - in print!
Sent: Wednesday, March 30, 2011 11:55 AM
Have you not looked into Snyder's emergency financial management proposal?
Have you not considered the tax breaks given the rich, part of what creates the so-called fiscal crisis?
Have you not noticed the widespread, concerted assault on the middle class, both from national and state governments?
What the hell?
Thanks. I addressed some of those in my column. the emergency manager plan was passed after I wrote my column, I think, and it is not part of the budget, per se. at this point I plan to include that in my next column.
Sent: Thursday, March 31, 2011 4:23 PM
saw your brilliant piece. thank you. I revel in all the parts of your credentials ... Midlanders want facts, figures, data and more ... and you provide it. even more you do it with great intelligence, creativity and gentleness.
Sent: Wednesday, March 30, 2011 10:39 PM
As a fellow retiree I agree that we in
It would make more economic sense to wait until the economy is well on its way to a full recovery before instituting any sort of tax increase that will impinge on the demand side of the ledger. At that point I will gladly pay a higher tax. The tax policy I see in place now only adds to the probability of a double dip recession.
Thank you very much for taking the time to email me your thoughts. These are definitely troubling economic times. I am now opposed to taxing pensions, but mainly for the reason that Snyder wants to use the revenue to give businesses a big break. I don’t think we can have it both ways. What you say makes abundant sense, but our legislators have tough decisions to make and I think one of them is a tax increase. They are afraid of talking about that and doing it. At least Snyder has put tax increases on the table.