Have spent the entire day reading the new pension tax law. I hate the Michigan legislature. Starting with the worthless human inhabiting the governors office. He ranks right up there with the worthless president and congress. Yes, I did use lower case letters.
I am going to make it on my retirement. I got my first 3% raise in Jan. That is the raise I will get every year from now on. Oh....wait....put on the breaks....I just lost it and then some. The raise was no big deal. It was one light bill payment a month. Which means that amount could be tacked onto another bill. I am good with that. However the legislature and the current idiot in the governors office believes that you take from those with the least amount of money and give to those with the most. So in Jan. he's going to tax my pension by 4.35%. He will kindly lower it to 4.25% in Jan. 2013. Wait....that means he's taking my 3% and then an additional 1.35%. How does this work. I just lost the light bill and the light bill again. That now has to come out of food money. Hmmm....guess I'll continue to lose weight won't I.
What it really means is that in order to pay my bills the extra $100 to pay down my mortgage is gone. It will be needed for bills. I still put money in savings but I refuse to lower that. I might need it at some point.
See this new tax does not effect people born before 1946. It directly impacts the baby boomers. If you were lucky enough to be born between 1946 and 1952, you get a $20,000 exemption if you are single and a $40,000 if you are married. If you were born after 1952, you are screwed. There is no exemption until you are 67 and if you exempt your pension then he's going to tax your social security. Don't kid yourself. He's taxing social security from the minute you draw it. And if you have a 401K he's taxing that too. So much for having put away money to support yourself. He's hitting baby boomners the hardest.
Well this baby boomer will give him one year. She's got her house up for sale and is moving to a state that does not tax pensions....maybe one that has no income tax at all. Yes, I'm doing my research. It's been nice knowing you all. I might be back some day for a visit. But once I move, I will never live here again.