Podcasts & RSS Feeds
Most Active Stories
- Don't like the water shut-offs in Detroit? Now you can pay someone's overdue water bill
- This ballot proposal is critical to Michigan's economy, but most people won't bother to vote on it
- Approaching construction on the highway? Experts say the "zipper merge" can help
- Some think their immigrant ancestors were the last that should be allowed in the U.S.
- Michigan Republican Party's tactics remind me of Watergate, because both were unnecessary
Tue August 6, 2013
Michigan's new tax on pensions challenged in court
A class-action lawsuit has been filed on behalf of retired public employees against the state for extending Michigan’s income tax to pensions.
Extending the income tax to pensions was part of a tax overhaul adopted by the Legislature in 2011 that scrapped the Michigan Business Tax.
People born after 1945 started paying taxes on pension income last year.
The lawsuit claims the state broke a promise made in writing to retirees.
The lead plaintiff is a retired school teacher who says state-managed pension funds for teachers and state employees made the promise in their official guidelines and tax information forms.
The lawsuit says retirees made financial plans based on the state’s promise.
The Michigan Supreme Court ruled in 2011 that the pension tax does not violate the state constitution’s protections against breaking contracts, but the retirees say that does not rule out a non-constitutional court challenge.
Politics & Government