Pensioners Screwed

In 2011 the State of Michigan passed Public Act 38, which made pension income subject to the 4% Michigan income tax.

As pensions are planned far in advance, there is no way for a retired person to renegotiate when economics change. The pensions were worked out years or decades ago with the understanding that they were not taxable. They are arguably even protected from diminution in the state constitution. Now, tens of thousands of families have to adjust their household spending to make up for the new tax.

Had PA 38 been passed in a normal way, those affected by it could have tried to challenge it with a referendum petition drive. However, it contained a $1M appropriation for the Treasury Department. They did not specify what that was for, just that it was appropriated. It is obvious that its only purpose was to make the law immune from challenge via referendum.

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