A community of 30,000 US Transcriptionist serving Medical Transcription Industry
For those of you who watched Rachel Maddow last night when she was slamming the Repbulican governors about their budget cuts, she mentioned the governor of Michigan wanted to "raise taxes on seniors" or something like that. Uh, she failed to mention that 90% to 95% of seniors pay zero tax. Isn't that important to mention?!
Here's a very short explanation about how my state taxes seniors. Michigan exempts social security payments and ALL public pensions from the state income tax. We also exempt private pensions, up to a limit of more than $90,000 per year for a married couple. We give senior citizens an exemption for interest, dividends and capital gains, up to a limit that exceeds $20,000 for a married couple.
These provisions make Michigan one of the most generous states in the country toward retirement income. More than 90% of Michigan senior citizens pay no income tax. Also, seniors are eligible for an enhanced Homestead Property Tax Credit. This means that Michigan’s senior citizens make net payments of less than zero in the state income tax.
The revenue loss from these exclusions is pushing toward $1 billion per year. As our population gets older, the revenue losses get larger every year.
My personal experience - my parents haven't filed a tax form for many, many years (they have no tax liability, according to the state). The many aunts and uncles of mine who have retired from the Big 3 (GM, Ford and Chrysler) pay zero taxes on the first $90,000 they bring home. That's $7500 tax-free income each month. That's probably the reason some seniors are upset. Is it fair? Personally, I don't think so. We are 1 of 10 states with this exemption, along with Alabama, Hawaii, Illinois, Kanasa, Louisiana, Massachusetts, Mississipii, New York, and Pennsylvania.
(getting off my soap box now)