Retiree groups challenge pension tax

The State Employee Retirement Association, the National Active and Retired Federal Employees Association and AARP have joined together on a brief before the Supreme Court arguing that the income tax on pensions that Snyder pushed is unconstitutional. In their amicus brief, the groups cite a constitutional guarantee exempting state worker pensions from taxes.

The Supreme Court has scheduled arguments on Sept. 7.

The tax was enacted earlier this year to help pay for the elimination of the Michigan Business Tax and replacing it with a new corporate income tax—a cost of $1.8 billion.

Under the legislation, taxes would apply to some retirement income for those ages 60 to 66. Retirees 67 and older would continue to get the same tax breaks they get now. Social Security income and military pension would be exempt.

In addition to the pension tax, cuts to school aid and other programs mean students, working families and the middle class will share the burden of paying for Snyder’s corporate tax breaks.