There’s more to this than meets the eye.
Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger are expected to confirm a compromise that would phase in Snyder’s proposed tax on pensions and delay by one year a scheduled decrease in the income tax.
The proposed deal would phase in the planned income tax for public and private pensions, one source said. Public pensions are not taxed in Michigan. Private pensions are taxed only above $45,000 for individuals and $90,000 for married couples.
The House and Senate Republican caucuses have been discussing a plan that would exempt those aged 67 and older from the pension tax, a second source with firsthand knowledge of the plan told The Detroit News. Some pension income would be exempted for those aged 66 and filing jointly, the source said. For people 60 to 66 years old, the first $20,000 would be exempt for an individual and the first $40,000 for a couple. Pensions would be taxed at the full rate for retirees aged 59 and younger.
This does two things that benefit Republicans. First, it answers the quiet outrage at raising taxes on seniors that has been simmering away among the tea party groups. It’s been eerily quiet from their corner of the room lately in Michigan and I’m certain it’s because they are not happy with Snyder’s budget plan but don’t want to be seen as siding with liberals, Democrats or organized labor unions in any way or getting in the way of Snyder’s kneecapping of their ideological nemeses, the “union goons”. By softening the impact of his budget on this constituency, the flush of tea party adherents that came into the State Congress last fall can claim victory and keep their constituents, the tea partiers anyway, happy.
Secondly, and more broadly, it benefits a key voting constituency, particularly for Republicans: senior citizens. This group benefits directly from this agreement.
The Detroit News piece also says “the deal also provides for another $150 million in spending cuts beyond those proposed by Snyder”. You can be sure that these cuts are not going to make seniors uncomfortable. My money is on K-12 education, the arts or our park system, none of which have powerful voting blocs.
I’ll update if anything comes out of the news conference that starts just about now.
I’m just sayin’…