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Old March 18th, 2011, 12:42 PM   #1
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Default Snyder's taxes at work...

LOL.

SO, my parents wanted to move back to Michigan and take advantage of the tax benefits on pension income. Then, BAM, Snyder proposes taxing pensions of retired persons - stating it's long been a loophole for people to avoid paying taxes.
I read his budget proposal and see that they project an ever-increasing populace of retirees in Michigan - and continued loss of revenue.

Now, does anyone here think those projections may have been tainted because of Michigan's lack of taxes for pensioners? Perhaps those projections won't be as optimistic if weighed against a 4.25% pension tax?

So, in my parent's case, they decided to move just across the state line to Indiana - where there is tax on pensions, but around 1% lower than Snyder's proposal for Michigan. IIRC, sales tax is also less in Indiana.


As I thought about it a bit, and my folks' situation - Here is what Rick will be throwing away with the "new retiree" tax:
Revenue
Initial sale of a home & yearly Property tax (local, of course, but leads to less state subsidies);
Sales tax on maybe $15k / year @ 6%;
Taxes on fuel, power and municipalities;
Support of local businesses.
^^^^^^
This is what will be lost because of the potential $1000 in tax revenue.

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Old March 18th, 2011, 12:48 PM   #2
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pension? whats that? j/k
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Old March 18th, 2011, 01:12 PM   #3
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Quote:
Originally Posted by ScOoTeR View Post
LOL.

SO, my parents wanted to move back to Michigan and take advantage of the tax benefits on pension income. Then, BAM, Snyder proposes taxing pensions of retired persons - stating it's long been a loophole for people to avoid paying taxes.
I read his budget proposal and see that they project an ever-increasing populace of retirees in Michigan - and continued loss of revenue.

Now, does anyone here think those projections may have been tainted because of Michigan's lack of taxes for pensioners? Perhaps those projections won't be as optimistic if weighed against a 4.25% pension tax?

So, in my parent's case, they decided to move just across the state line to Indiana - where there is tax on pensions, but around 1% lower than Snyder's proposal for Michigan. IIRC, sales tax is also less in Indiana.


As I thought about it a bit, and my folks' situation - Here is what Rick will be throwing away with the "new retiree" tax:
Revenue
Initial sale of a home & yearly Property tax (local, of course, but leads to less state subsidies);
Sales tax on maybe $15k / year @ 6%;
Taxes on fuel, power and municipalities;
Support of local businesses.
^^^^^^
This is what will be lost because of the potential $1000 in tax revenue.
What I got from this is that tax on pensions in a common thing these days. Like other things, the tax rate varies state to state.


Scenario #1
In 3 years Indiana raises it pension tax rate 1.5%, now higher than Michigans. Do your parents move again?

Scenarion #2
Snyders plan gets denied and none of this bill is passed, meaning no new tax on pensions. Do your parents sell their house in Indiana and move to Michigan?

Why not buy a house in Michigan where property taxes are dirt cheap and offset all the other taxes?
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Old March 18th, 2011, 01:35 PM   #4
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Quote:
Originally Posted by ScOoTeR View Post
LOL.

SO, my parents wanted to move back to Michigan and take advantage of the tax benefits on pension income. Then, BAM, Snyder proposes taxing pensions of retired persons - stating it's long been a loophole for people to avoid paying taxes.
I read his budget proposal and see that they project an ever-increasing populace of retirees in Michigan - and continued loss of revenue.

Now, does anyone here think those projections may have been tainted because of Michigan's lack of taxes for pensioners? Perhaps those projections won't be as optimistic if weighed against a 4.25% pension tax?

So, in my parent's case, they decided to move just across the state line to Indiana - where there is tax on pensions, but around 1% lower than Snyder's proposal for Michigan. IIRC, sales tax is also less in Indiana.


As I thought about it a bit, and my folks' situation - Here is what Rick will be throwing away with the "new retiree" tax:
Revenue
Initial sale of a home & yearly Property tax (local, of course, but leads to less state subsidies);
Sales tax on maybe $15k / year @ 6%;
Taxes on fuel, power and municipalities;
Support of local businesses.
^^^^^^
This is what will be lost because of the potential $1000 in tax revenue.
Agreed, but it's not the whole picture.

I moved to Niles MI because of the substantially lower property taxes and lower state income tax. Now income tax may not affect your parents with their pension. I just think there are trade offs.

Quote:
Originally Posted by Steve-in-Petoskey View Post
pension? whats that? j/k
Tell me about it? I have one and I'm sure in 30+ years it will be taxed 95% because no one else has a pension.

Quote:
Originally Posted by dreezy View Post
What I got from this is that tax on pensions in a common thing these days. Like other things, the tax rate varies state to state.


Scenario #1
In 3 years Indiana raises it pension tax rate 1.5%, now higher than Michigans. Do your parents move again?

Scenarion #2
Snyders plan gets denied and none of this bill is passed, meaning no new tax on pensions. Do your parents sell their house in Indiana and move to Michigan?

Why not buy a house in Michigan where property taxes are dirt cheap and offset all the other taxes?
Sc.#1 agreed I don't see anyone take the percentages down
Sc. #2 agreed again I don't see people calculating what can ge gained or saved everytime there is a tax move. but more likely like his parents, just when it's time to make a decision.

Agreed on purchasing in MI, that's what I did 8 years ago, I've moved 3times since then but taxes were always lower (NET) in Michigan than Indiana or Ohio. Fukc OHIO taxes! You have to research them ALL, there is Regional Income Tax (varies by city), there is property tax, there is school tax. Yes they are all the same as Michigan but at least Michigan collects them all at once. VA is another state I'll never move to. They are a Commonwealth and you have to pay personal property taxes every year on what you own. What a pain in the ass!

If nothing else a small increase in Michigan is worth not tracking down the hassle of Indiana and Ohio tax laws.
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Old March 18th, 2011, 01:55 PM   #5
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If the new taxes go into place here, it will cost more to live in Michigan. This is according to my parents that:

Lived in Indiana, moved to Michigan;
Lived in Michigan and moved to Arkansas ( );
Going to move back to be closer to family in Indiana.

I still think that if the taxes get applied to pensions, the projected number of retirees in Michigan is still a bit optimistic. I still believe a net loss will occur.
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Old March 18th, 2011, 02:51 PM   #6
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I really wonder how much retirees know when they complain. For the record, DISCLAIMER I'm in a trusting Rick mode at the moment and don't know much about pensions since I will never qualify for one. I had a recent conversation with my mom that went like this.

Mom; It really makes me mad that they are going to tax private pensions but not public ones.
Me; Mom, Did Dad pay pre-tax dollars into his pension?
Mom; I don't know.
Me; So you don't know if you ever pre-paid taxes on the dollars that you put into your pension.
Mom; No
Me; Mom, do you know if the public employees pre-paid taxes on their pensions?
Mom; No
Me; So, you don't know if you ever paid taxes on your pension and you don't know if the public employees paid taxes on their pensions?
Mom; No I don't, but if they're going to tax one group, they need to tax them all.
Me; But what if they already paid taxes and you didn't?
Mom; If they're going to tax one group, they need to tax them all.

All in all, my mom's pretty sharp but she's a little worked up on this one.
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Old March 18th, 2011, 03:06 PM   #7
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Originally Posted by ScOoTeR View Post
I still think that if the taxes get applied to pensions, the projected number of retirees in Michigan is still a bit optimistic. I still believe a net loss will occur.
I think that's a safe assumption, I would think a portion of their estimate is based on past influx of retirees and I assume, and hope, they adjusted that going forward. But I have little faith in them, I would like to downsize their asses.
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Old March 18th, 2011, 03:14 PM   #8
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Yes, I'm sure that someone as business minded as Rick Snyder is looking at outdated census material.
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Old March 18th, 2011, 03:22 PM   #9
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Newsflash: homes aren't selling. It's like raising the net in a minnow trap. 99% of them will talk about moving, 2% actually will.
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Old March 18th, 2011, 08:29 PM   #10
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Old March 18th, 2011, 08:35 PM   #11
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This is why I'll never retire. (and I'll be one of those mofo's that DIES 2 weeks after they retire)
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Old March 18th, 2011, 08:38 PM   #12
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I have not read the bills/proposals, but was under the impression that the income tax applicable to pensions will still exempt up to just shy of $50k/year?

no offense to those lucky enough to have a pension income that high or higher, but if you get paid that much to remain an anchor on whatever employer is still forced to help fund the pension system you are drawing against then, sorry I don't feel too badly that some 4.5% will be newly levied. (and yes, my mom is a recently retired public school teacher so she stands to have multiple aspect of her standard of living impacted)

if I am mistaken, about that exemption amount, I'll glady fukc off :)
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Old March 19th, 2011, 02:23 AM   #13
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Quote:
Originally Posted by ScOoTeR View Post
LOL.

SO, my parents wanted to move back to Michigan and take advantage of the tax benefits on pension income. Then, BAM, Snyder proposes taxing pensions of retired persons - stating it's long been a loophole for people to avoid paying taxes.
I read his budget proposal and see that they project an ever-increasing populace of retirees in Michigan - and continued loss of revenue.

Now, does anyone here think those projections may have been tainted because of Michigan's lack of taxes for pensioners? Perhaps those projections won't be as optimistic if weighed against a 4.25% pension tax?

So, in my parent's case, they decided to move just across the state line to Indiana - where there is tax on pensions, but around 1% lower than Snyder's proposal for Michigan. IIRC, sales tax is also less in Indiana.


As I thought about it a bit, and my folks' situation - Here is what Rick will be throwing away with the "new retiree" tax:
Revenue
Initial sale of a home & yearly Property tax (local, of course, but leads to less state subsidies);
Sales tax on maybe $15k / year @ 6%;
Taxes on fuel, power and municipalities;
Support of local businesses.
^^^^^^
This is what will be lost because of the potential $1000 in tax revenue.

So your parents decided to live in Indiana to save $235 in income tax, which they will give back in sales tax? (you are wrong about sales tax being lower in Indiana, it's 7%, 1% higher than Michigan) Also things like vehicle registration fees are much higher there.

But to your main point, yes, there will be some retirees that may choose to live in another state besides Michigan if Michigan decides to tax pensions, but I believe whatever tax revenue is lost by them leaving will be way less than what is made by taxing them.

And I have no problem with them being taxed. With his social security and Ford pension my dad made more than I did working last year. Why shouldn't he be taxed the same as me?
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Old March 19th, 2011, 09:46 AM   #14
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So your parents decided to live in Indiana to save $235 in income tax, which they will give back in sales tax? (you are wrong about sales tax being lower in Indiana, it's 7%, 1% higher than Michigan) Also things like vehicle registration fees are much higher there.

But to your main point, yes, there will be some retirees that may choose to live in another state besides Michigan if Michigan decides to tax pensions, but I believe whatever tax revenue is lost by them leaving will be way less than what is made by taxing them.

And I have no problem with them being taxed. With his social security and Ford pension my dad made more than I did working last year. Why shouldn't he be taxed the same as me?
He put on his Facebook (Probably not his, but 'his') Something along the lines of that paragarph. Why should a family who makes 65K a year pay taxes on thier wages when a retiree making 65K a year has to. I agree.
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Old March 19th, 2011, 10:54 AM   #15
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So your parents decided to live in Indiana to save $235 in income tax, which they will give back in sales tax? (you are wrong about sales tax being lower in Indiana, it's 7%, 1% higher than Michigan) Also things like vehicle registration fees are much higher there.

But to your main point, yes, there will be some retirees that may choose to live in another state besides Michigan if Michigan decides to tax pensions, but I believe whatever tax revenue is lost by them leaving will be way less than what is made by taxing them.

And I have no problem with them being taxed. With his social security and Ford pension my dad made more than I did working last year. Why shouldn't he be taxed the same as me?
Dude, who knows what goes on in our parent's heads?
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Old March 19th, 2011, 11:26 PM   #16
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Level the playing field for everbody, tax each dollar of imcome equally. Lets see how bitches about equality.
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Old March 20th, 2011, 03:46 AM   #17
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Level the playing field for everbody, tax each dollar of imcome equally. Lets see how bitches about equality.
Have you been drinking?
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Old March 20th, 2011, 09:11 AM   #18
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Not enough, not nearly enough
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Old March 20th, 2011, 10:01 AM   #19
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Have you been drinking?
That was way past my bed time and I didn't have my glasses on, but no drinking. I stick to tax each dollar.
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