My Take: Inflation relief should include repealing Michigan’s retirement tax

Right now, Michiganders are feeling the pain of rising prices at grocery stores, restaurants, and the gas pump. As political ads blanket our airwaves, you have likely heard plenty of rhetoric from politicians promising to ease the impact of inflation, but with no real plan to do that. While some lawmakers may try to pass the buck on to Washington, the reality is our state legislature can take meaningful action now to deliver inflation relief.

One key policy solution is to repeal the retirement tax. The tax currently takes 4.25% of hard-earned retirement income from Michigan seniors. But it wasn’t this way until about a decade ago — when Republican legislators levied this tax on the backs of retirees to pay for state corporate tax cuts.

The consequences since then have been far reaching: Seniors who worked their entire lives had to foot an unexpected bill, and now, that tax is taking money away from seniors that could be used to combat the rising cost of living. By eliminating this tax, we could put an estimated $1,000 per year back in the pockets of retirees.

I know firsthand the importance of ensuring retirement security. My grandfather immigrated to America and worked his entire career as a union carpenter to provide for our family in Decatur, Michigan. After he passed away, his union pension helped my grandmother keep their home until her death. Nonetheless, the tax on that pension was an unanticipated expense she received after having been retired for almost 20 years.

Every Michigander deserves to live with dignity and economic security like my grandparents did. It’s past time we end the partisan gridlock in Lansing and take action — like repealing the retirement tax — to help working families.But we can’t stop there. Because of inflation, Michigan’s sales tax revenue has generated an unexpected surplus. We should give that surplus back to Michiganders by sending $500 relief checks, and we should increase the earned income tax credit.

We should also raise the minimum wage so that all Michigan workers earn a living wage — and make sure it’s indexed to inflation so that they don’t fall behind. We should strengthen laws to make it easier to unionize so that more workers can collectively bargain for higher wages, better retirement benefits, and safer working conditions. When unions grow, so does our economy.

We are all feeling the squeeze of rising prices, and the people of Michigan deserve more than politicians who merely pay lip service to addressing inflation. We need a real plan — and a legislature that works for us, not for special interests. By repealing the retirement tax, providing $500 relief checks, and raising wages, we can enact a pro-worker agenda that leaves nobody behind.

— Joey Andrews is a policy analyst at Michigan AFL-CIO and is the Democratic state representative candidate in Michigan’s 38th District. He is a St. Joseph resident.

This article originally appeared on Sturgis Journal: My Take: Inflation relief should include repealing Michigan’s retirement tax