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Whitmer announces Tax Cut

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Round Six
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Re: Whitmer announces Tax Cut

Post by Round Six » Sun Jan 29, 2023 9:37 am

So here's a question I don't know the answer to.
Are pension taxes a double tax?
Did retirees pay taxes on upcoming pensions while they are working?

I can understand real estate brokers and other self employed people being opposed to pensions being tax free because you are not going to get the proceeds from your IRA or SEP IRA or maybe a solo 401(k) tax free when you start drawing it out.
And your possibility disgruntled that others will.


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craig11152
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Re: Whitmer announces Tax Cut

Post by craig11152 » Sun Jan 29, 2023 10:06 am

Round Six wrote:
Sun Jan 29, 2023 9:37 am
So here's a question I don't know the answer to.
Are pension taxes a double tax?
Did retirees pay taxes on upcoming pensions while they are working?

I can understand real estate brokers and other self employed people being opposed to pensions being tax free because you are not going to get the proceeds from your IRA or SEP IRA or maybe a solo 401(k) tax free when you start drawing it out.
And your possibility disgruntled that others will.
My limited research suggests the employer contribution year to year is not considered income for that year.


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MWmetalhead
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Re: Whitmer announces Tax Cut

Post by MWmetalhead » Sun Jan 29, 2023 1:29 pm

Correct; it is not a double tax. Moreover, employer pension contributions are deductible expenses for corporate income tax purposes.

Pensioners only pay taxes on pension income once withdrawals are taken (just like a traditional 401K or 403B plan, to echo what Round Six wrote).



Round Six
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Re: Whitmer announces Tax Cut

Post by Round Six » Sun Jan 29, 2023 3:05 pm

craig11152 wrote:
Sun Jan 29, 2023 10:06 am
My limited research suggests the employer contribution year to year is not considered income for that year.
Thanks.

The way I look at it, the pension tax cut is up to the current and future pensioners. If they play complacent thinking just because Whitmer said it will happen, then it probably never will.

If however those standing to benefit from the tax cut become rabble rousers, make some noise and keep bugging those in Lansing, it probably will happen.

Our governor is now lame duck. She can make all sort of promises and suffer little consequence if she don't follow through. Both my state senator and state rep are starting their first term. And both promised the pension tax cut while campaigning. Failure for the tax cut to be enacted by 2026 may not go as well for them.


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A1B1C1D1
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Re: Whitmer announces Tax Cut

Post by A1B1C1D1 » Sun Feb 05, 2023 6:12 am

MWmetalhead wrote:
Sun Jan 29, 2023 7:16 am
I like your plan (i).
Thanks.

There are states where such laws currently exist relative to property taxes. In the following states, seniors pay no property taxes on their homestead (a few on this list may surprise you):

Alabama
Alaska
Florida
Georgia
Hawaii
Mississippi
New Hampshire
New York
South Carolina
South Dakota
Texas
Washington

I'm not willing to go *that* far in terms of tax relief for seniors, but I think the first $150,000 to $200,000 of normally taxable value for primary residences owned by seniors should be tax exempt.

Another way to accomplish this would be to retool the homestead property tax credit that can be claimed by Michigan income tax return filers to extend much more generous benefits to seniors.
And Florida has no income tax!



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Re: Whitmer announces Tax Cut

Post by Matt » Mon Feb 06, 2023 3:57 pm

The Democrats want to send out $180 to PREVENT the rate from automatically dropping from 4.25% to 4.05%. A married couple with a modest taxable income of $90,000 would see a one-time check/direct deposit of $180. Meanwhile, with a rate reduction, they would have their tax liability reduced by that amount each year.


What's more pathetic: harassing an old man who is paying to do a radio show or supporting a grifter like Trump?

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HD74
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Re: Whitmer announces Tax Cut

Post by HD74 » Tue Feb 07, 2023 12:13 am

So what do you recommend we do?


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Matt
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Re: Whitmer announces Tax Cut

Post by Matt » Tue Feb 07, 2023 5:52 am

HD74 wrote:
Tue Feb 07, 2023 12:13 am
So what do you recommend we do?
Let the automatic tax cut happen.


What's more pathetic: harassing an old man who is paying to do a radio show or supporting a grifter like Trump?

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MWmetalhead
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Re: Whitmer announces Tax Cut

Post by MWmetalhead » Tue Feb 07, 2023 6:59 am

married couple with a modest taxable income of $90,000 would see a one-time check/direct deposit of $180. Meanwhile, with a rate reduction, they would have their tax liability reduced by that amount each year.
Depends what personal and dependent exemptions are claimed, but yes, the reduction in tax liability yearly would be a positive.

I certainly agree that the $180 one-time rebate is underwhelming.

The 0.2% marginal income tax rate reduction that is supposed to kick in is also underwhelming, but it would be better for many than a simple one-time rebate.

The Democrats' proposal is certainly lame, but I've yet to see any meaningful competing proposal from Republican leadership this legislative session. I liked the legislation that passed last year, which unfortunately, was vetoed by Whitmer. Dixon should've pounced on that fact much more aggressively, especially in campaign ads.



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MWmetalhead
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Re: Whitmer announces Tax Cut

Post by MWmetalhead » Tue Feb 07, 2023 7:04 am

And Florida has no income tax!
The state sales tax there, unlike Michigan, applies to both goods and services. In Michigan, the sales tax only applies to goods.

Also, many counties in Florida levy their own sales tax, and they also have the ability to levy fuel taxes, too.

Given the very high amount of tourism in Florida, relying very heavily on sales taxes makes a lot of sense.



Matt
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Re: Whitmer announces Tax Cut

Post by Matt » Tue Feb 07, 2023 8:00 am

MWmetalhead wrote:
Tue Feb 07, 2023 6:59 am
married couple with a modest taxable income of $90,000 would see a one-time check/direct deposit of $180. Meanwhile, with a rate reduction, they would have their tax liability reduced by that amount each year.
Depends what personal and dependent exemptions are claimed, but yes, the reduction in tax liability yearly would be a positive.

I certainly agree that the $180 one-time rebate is underwhelming.

The 0.2% marginal income tax rate reduction that is supposed to kick in is also underwhelming, but it would be better for many than a simple one-time rebate.

The Democrats' proposal is certainly lame, but I've yet to see any meaningful competing proposal from Republican leadership this legislative session. I liked the legislation that passed last year, which unfortunately, was vetoed by Whitmer. Dixon should've pounced on that fact much more aggressively, especially in campaign ads.
I was specifically referencing the bottom line taxable income after claimed exemptions (line 16 on MI-1040).


What's more pathetic: harassing an old man who is paying to do a radio show or supporting a grifter like Trump?

Taco
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Re: Whitmer announces Tax Cut

Post by Taco » Tue Feb 07, 2023 10:05 am

A $180 check is very underwhelming indeed. I'll take it though. Breaking it down that is like about .49/day. :rollin
Last edited by Taco on Tue Feb 07, 2023 11:04 pm, edited 1 time in total.


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ZenithCKLW
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Re: Whitmer announces Tax Cut

Post by ZenithCKLW » Tue Feb 07, 2023 11:12 am

Taco wrote:
Tue Feb 07, 2023 10:05 am
A $180 check is very underwhelming indeed. I'll take it though. Breaking it down that is like about .49/week. :rollin
You might want to redo your math. lol



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MWmetalhead
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Re: Whitmer announces Tax Cut

Post by MWmetalhead » Tue Feb 07, 2023 12:08 pm

It's damn near tree fiddy! :)

(Hope the Loch Ness Monster doesn't attack us now.
South Park reference.)



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craig11152
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Re: Whitmer announces Tax Cut

Post by craig11152 » Tue Feb 07, 2023 12:41 pm

Pretty sure he meant .49/day


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