An olive leaf on tax policy

The AARP is a dogged advocate for senior citizens. But this dogged advocate is setting a collaborative tone on Michigan tax policy.

Steve Gools, AARP Michigan senior state director, recently did a pretty rare thing in Lansing — he suggested his interest group was willing to step outside its own interest and sacrifice.

Michigan State University’s policy network recently quoted Gools as saying AARP could support a higher taxes on senior citizens if such a hike “was part of a broad plan of fairer taxes…We believe that a tax policy should be progressive…But we should not attempt to balance Michigan’s budget on the backs of senior citizens alone. We need a fair and balanced approach.”

Some economists have long questioned the tax-free ride pensioners get in Michigan. And national studies suggest Michigan is far more generous than other states when it comes to senior citizen taxes.

Whether pension taxes become part of a long-term budget solution remains unclear. But AARP’s willingness to open the door to dialogue is something many other single-interest groups on both the spending and taxing sides in Lansing could emulate.

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2 Comments

  1. Posted December 10, 2009 at 12:19 pm | Permalink

    I have advocated pension income tax reform in Michigan for many years. It is not an easy topic for discussion, as most people do not realize how Michigan’s income tax treatment of 401k, SSI, and Pensions actually works.

    The AARP, of which I am a member, understands this. And, in the best interest of their members residing in Michigan, realize that we must help pay for our infrastructure in retirement to have a stable society.

    The Center for Michigan should be commended for backing a discussion on this topic, long overdue and in urgent need of reform.

    John H.

  2. Posted December 10, 2009 at 12:23 pm | Permalink

    You can see an article I wrote on this topic published in the Livingston Press Argus in 2006, posted on Salon.com at this address.

    http://open.salon.com/blog/johnth/2009/07/18/income_tax_on_pensions_in_michigan