By Kathy Barks Hoffman
Associated Press
LANSING (AP) — Scores of seniors upset that the state wants to tax some of their public pensions for the first time packed into the Michigan Supreme Court last week as lawyers argued whether the new charge is legal.
“By imposing an income tax on public employees ... the state is violating the public trust,” said assistant attorney general B. Eric Restuccia in arguing the tax should be struck down.
Not so, said John Bursch, the assistant attorney general arguing to keep the tax.
“This isn’t a new concept,” he said, arguing that the state never gave up its right to tax pensions when protection for public pensions was written into Michigan’s constitution.
The case is a major test of sweeping tax changes put in place earlier this year by Republican Gov. Rick Snyder.
He wants a Supreme Court advisory opinion that would effectively pre-empt any court challenge on the law filed by opponents such as public employee unions, who say the state constitution protects their pensions from being taxed.
Opponents say the tax would reduce the pension income public sector employees have already earned, which violates the state constitution.
They also say the tax would violate public workers’ constitutional right to not have their contracts impaired and creates a graduated income tax — also banned in the state constitution — by taxing retirees differently based on their income level.
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