People who worked for government at the federal, state and local level and who qualify for pension benefits previously exempt from taxation are strongly opposed to the new tax. They claim the act is unconstitutional because it would violate a ban on a graduated state income tax, an issue which is being debated in the Michigan Supreme Court. Retirees are most concerned because if this plan goes through there would be a sudden decrease in the money they now rely on and that they worked so hard for.
While opponents of the plan have made it seem radical and unfair, there have been compromises and certain exemptions have been created to ease retirees into this tax. These exemptions are intended to not radically change the lives of retirees, with exemptions for those who were born before 1946 for instance making them completely unaffected by the new tax, and with many other exemption plans designed to ease the process of the tax by having fewer and fewer exemptions in the following years. Through these exemptions, Snyder plans on limiting the income lost on those who rely on their pensions to survive, say those with a pension and retirement income of less than $20,000 for an individual or $40,000 for a joint return, while excluding people with a household income of over $75,000 for an individual or $150,000 for a joint return, thus trying to distribute the taxes in such a way so that the poor are not overburdened.
For people who were born after 1952 the proposed law states that no exemptions may be filed until the person reaches the age of 67, thus taxing those who have not been relying on retirement and pension plans for very long, if at all..