To the editor:
A March 20 letter writer regurgitates Democrat talking points in an attempt to alienate voters against Republicans, big business and corporations (he deems "the wealthy"). The truth and facts about the Republican tax law changes he omits are as follows:
All existing and future retirees' social security, railroad and military pension income remain exempt from Michigan income tax.
For senior citizens age 67 and older, there will be no changes to the tax breaks on their pension and retirement income.
Michigan residents age 60 to 66 may exempt $20,000 of public and private pension income for a single filer, and $40,000 for joint filers. Above those levels, the income will be taxed at the state income tax rate of 4.35 percent. When these residents turn 67, the $20,000/$40,000 exemption will apply to all their income.
Residents younger than 60 will see all their public and private pension income taxed as regular income at 4.35 percent until they turn 67, at which point they'll qualify for a senior income exemption of $20,000 for single filers and $40,000 for joint filers.
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The Michigan income tax rate on corporation profits actually increased from 4.35 percent to 6 percent under the new Republican tax law. The tax on modified gross receipts was eliminated, because it resulted in corporations paying state taxes even when they were losing money and had a loss for the year.
The double taxation of business profits by the business and owners, was eliminated on partnerships, sole proprietorships and Sub S corporations, where all the business profits flow through to the owner and are taxed on their individual income tax returns. Only owners will be taxed.
Taxing business receipts and profits and double taxing business income is no problem for Democrats, like the letter writer, who uses demagoguery against businesses and corporations and pigeonholes them as "the wealthy," thinking that money and wealth automatically falls in their lap.
Michigan is among 28 states that exempt social security from income tax and among 26 states that exempt military pensions. Michigan (for those 67 and older) is among only 10 states that exempt public pensions from state income tax. Forty other states have higher income tax rates than Michigan and the federal government taxes pension/retirement income at rates of 10 percent to 35 percent.
Like Paul Harvey said, "Now you know the rest of the story."