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Posted on Tue, Apr 12, 2011 : 1:58 p.m.

Snyder, Republican legislators close to deal on pension tax, business tax cut, reports indicate

By Nathan Bomey

UPDATE 6:09 p.m.: Snyder, Republicans unveil new proposal

Gov. Rick Snyder and the Republican leadership in the Michigan Legislature may be on the cusp of announcing a budget deal that would involve a major business tax cut and some form of a pension tax, according to multiple reports trickling out of Lansing this afternoon.

Several news organizations, including the Detroit Free Press, the Associated Press, the Detroit News and Gongwer News Service, are reporting that Republicans are close to announcing a tentative deal.

Rick Snyder in office 3.JPG

Michigan Gov. Rick Snyder

Lon Horwedel |

It's not clear whether the deal involves an agreement on the entire budget or just parts of the budget.

At 2:30 p.m., the governor's media representatives issued a statement saying that at 4 p.m., Snyder, Lt. Gov. Brian Calley, House Speaker Jase Bolger and Senate Majority Leader Randy Richardville would "hold a media roundtable to discuss significant progress on the tax reform plan."

Snyder has proposed replacing the state's controversial Michigan Business Tax with a flat 6 percent corporate income tax that would exempt many small businesses. It would result in a net $1.8 billion tax cut for businesses.

He also wants to tax all pensions except those held by members of the military — a proposal that would eliminate the total exemption for public pension holders and the $45,000-per-person exemption for private pension holders. That proposal would raise about $900 million in revenue.

The entire budget, including the current $1.4 billion deficit, would be balanced by eliminating most business tax credits and individual income tax credits and enacting big funding cuts to public schools, higher education and municipalities.

The Detroit News is reporting that the tentative deal would "phase in the planned income tax for public and private pensions." But the Free Press is reporting that the deal may "include exempting all pension income for those over age 66, and exempting $45,000 in pension income ($90,000 for couples) for some younger retirees."

Several attempts by to reach Republican legislative officials this afternoon were not immediately successful.

Snyder's proposal to tax all pensions met sturdy opposition among some anti-tax Republicans and Democrats uncomfortable with the implications for low-income seniors.

Republican legislators have reportedly been considering a scaled-back version of the pension tax and business tax cut.

Snyder, a first-time politician and a former venture capitalist, has portrayed the proposal as fair. He said seniors with pensions should not get preferential tax treatment compared to seniors who are taxed on their regular earnings. He also argued that the business tax reform would simplify the state's tax process and create jobs, a claim that drew skepticism from some experts.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Thu, Apr 14, 2011 : 4:18 p.m.

Seriously - what is not to understand about a flat rate it too simple? And why not tax the pensions...why live tax your fair share - what fairy god mother came down and offered you a sweet heart deal.

Nathan Bomey

Tue, Apr 12, 2011 : 10:10 p.m.

Here's our story on the new proposal: <a href=""></a> Will be updating.


Tue, Apr 12, 2011 : 9:19 p.m.

So we get a tax break for corporation, which is Snyder's magic wand for job creation. The hope is that said corporations will give us back our tax money and spend it in Michigan to create some jobs. We are talking about a state budget, which has to be balanced. That means any money given to corporations in tax breaks has to come from some where else like um...poor people, funding colleges, from teachers, seniors and infastructure, where all the money is spent back in the state. So this state revenue crushing tax break will provide zero extra dollars into our economy. It is only a shift by definition. But Corps and the rich people who run them will spend the money we gave them in Michigan to create jobs right? 1) They can use the money to provide dividends to share holders, who are from everywhere and will spend their money in their home state/foreign country. 2) If a corp is head quartered in another state, the money will go to that state and be spent expanding their operations there. 3) Corps get to right off state taxes, so no/less state taxes means less federal tax right offs, which means they will have show the state tax savings as income on their federal taxes, which means some of the tax break will go to the feds and not instate. 4) They can double down and use the money to buy State bonds and loan it back to use with interest. 5) Or they can hold onto the money like to $2 tillion US corps have in cash on the books for a sunny day. People create economic growth and Michigan has been losing people for years. Snyders cuts for higher ed and starving city/towns of funds will not make out of state families excited about moving to our state and forget seniors. And this goes double for CEOs. They do not like moving to a states with declining education and infastructure investment either.


Tue, Apr 12, 2011 : 9:12 p.m.

it may be painfull for a year or 2, but the state hopefully will be in a better fiscal position. As business picks up, more tax revenue will be collected. Again, if someone has a better detailed plan other than raising taxes to cover our debt, let's hear it. Otherwise quit whining and help to solve the problems.

Edward R Murrow's Ghost

Tue, Apr 12, 2011 : 9:21 p.m.

&quot;Again, if someone has a better detailed plan other than raising taxes to cover our debt, let's hear it.&quot; Yes, because we couldn't possibly expect the states residents and its businesses to actually PAY for the things we expect government to do. Good Night and Good Luck

Edward R Murrow's Ghost

Tue, Apr 12, 2011 : 9:01 p.m.

Sure hope this works because, if it doesn't , we will be much worse off in three years than we are today. So, the starting point is: Michigan's unemployment rate is currently 46th of 51 &quot;states&quot; (including DC) at 10.4%. (It is interesting to note that 10 of the 15 worse states in terms of unemployment are solid red states with low taxes and with right-to-work laws. Hmmmm. Seems that, perhaps, those are the silver bullet. But, never mind facts. Let's live the myth). The median (26th) unemployment rate is that of New Mexico at 8.7% Michigan's unemployment rate, then, is 1.7% away from the median state. Source: <a href="" rel='nofollow'></a> Let's check back in a year to see what this $1.8 billion dollar gift to business while taxing seniors and the poor, and while severely damaging the finances of untold municipalities and school districts has done for the state's economy in relatinship to the above numbers. Yes, I understand that this is the budget for next year. But if this is SUCH a good fix, businesses should come running here immediately. It's not like there aren't a lot of empty factories and office spaces for them to occupy. Good Night and Good Luck

Atticus F.

Tue, Apr 12, 2011 : 8:57 p.m.

In a time when we're cutting funding for schools, police, and fire service, it's nice to know that corporations will be recieving a nice fat tax break... Corporate welfare in its most basic form.

Moscow On The Huron

Tue, Apr 12, 2011 : 8:56 p.m.

This is great. Despite the fact the left wants to try to convince us that this isn't why we elected him, this is exactly what we wanted. The Democrats have been creatively inventing new ways to buy votes through new giveaways, calling them &quot;entitlements&quot; to fool them into believing they are entitled to them, all the while thinking there is some Magic Mountain Of Money that will somehow provide the money to fund them. The people have figured out there is no Magic Mountain Of Money and sent adult supervision to Lansing to do the right thing. The fact that here are sounds of gnashing of teeth coming from Ann Arbor only shows us they're doing the right thing. OK, now it's time to tell me how I hate teachers, the middle class, the poor, etc.

Edward R Murrow's Ghost

Tue, Apr 12, 2011 : 9:06 p.m.

&quot;This is great. Despite the fact the left wants to try to convince us that this isn't why we elected him&quot; I have no doubt that this is WHY you elected him. I'm certain you are dancing in the streets. But for many others, nothing in his platform suggested this is what he was going to do. Well, that's not exactly true. He started by saying he was going to cut business taxes by $1.5 billion. Then, when his numbers started to go down, he changed his tune, saying the number was going to be closer to $900 billion. Now, as it turns out, the cut was $1.8 billion. And he NEVER explained during his campaign how he was going to balance the budget with those cuts. Who says Snyder isn't a politician? He played the lemmings who voted for him like a fiddle. Good Night and Good Luck

Atticus F.

Tue, Apr 12, 2011 : 8:59 p.m.

So I guess the uber wealthy are ENTITLED to make a fortune, and not contribute to schools, roads, police, and other services?

Bertha Venation

Tue, Apr 12, 2011 : 8:44 p.m.

It's a dirty job... but SOMEBODY's got to do it. Look at all the progress we've made in the last eight years. (heh... ya... I KNOW!!)

Top Cat

Tue, Apr 12, 2011 : 8:35 p.m.

Another ray of hope that we are becoming a New Michigan where our children don't have to leave to find jobs.


Tue, Apr 12, 2011 : 8:18 p.m.

It's those nasty TeaPublicans at it again! Slick Rick is giving his buddies on Wall Street a break and looting the middle class. This in nothing more than class warfare. (Just trying to preempt someone else.)

Top Cat

Tue, Apr 12, 2011 : 8:42 p.m.

Truly Epic ! Dearest Ghost would have taken 7 paragraphs to say the same thing.

Moscow On The Huron

Tue, Apr 12, 2011 : 8:30 p.m.

Love it


Tue, Apr 12, 2011 : 8:11 p.m.

outstanding the state is ready to move forward


Tue, Apr 12, 2011 : 7:58 p.m.

P. T. Barnum was the visionary - these guys just implement his business model.


Tue, Apr 12, 2011 : 7:30 p.m.

The guy has tough decisions to make. Nobody is going to be happy. I'm glad someone is actually finally making them. For too long government has simply given away too much and it is totally unsustainable. I work in the private sector. I receive payment only if I produce. I receive no pension (unless you call Social Security a pension), no healthcare - unless I pay for it, no car allowance, COLA increase, paid sick days, vacation days, etc. People who do receive these things go ballistic when they are asked to 'contribute' to their own compensation. Look, anyway you slice it, receiving things like 90% compensation for 5 years of service (Roger Fraser and Neil Berlin), is a joke. Teachers who are upset should go after these types of deals which are every bit as egregious as fact cat corporate types. These deals are going to KILL local, state and federal governments and put a LOT of regular folk out of work. That's not Snyder's fault! The taxpayers ARE ALREADY paying for this type of stuff. I'm glad someone in Lansing is starting to look out for me, too. I was about to get a government job!!

True Facts

Tue, Apr 12, 2011 : 7:21 p.m.

Rick keep up the good work. Lets keep moving forward to a better michigan

Ace Ventura

Tue, Apr 12, 2011 : 6:54 p.m.

See you all at the Recall Party

Nathan Bomey

Tue, Apr 12, 2011 : 6:37 p.m.

Just added this to the story, fyi: &gt;&gt;&gt;At 2:30 p.m., the governor's media representatives issued a statement saying that at 4 p.m., Snyder, Lt. Gov. Brian Calley, House Speaker Jase Bolger and Senate Majority Leader Randy Richardville would &quot;hold a media roundtable to discuss significant progress on the tax reform plan.&quot;

Moscow On The Huron

Tue, Apr 12, 2011 : 6:22 p.m.

3.... 2.... 1....