Truth Squad calls foul on Snyder attack ad

How we make the call

Truth Squad assigns five ratings to the political statements we review, in descending levels of accuracy:

Accurate
No factual inaccuracies in the statement and no important information is missing
Mostly accurate
While the statement is largely accurate, it omits or exaggerates facts, or needs some clarification
Half accurate
Truths are interspersed with mistruths, or the speaker left out significant facts that render his/her remarks misleading in important respects
Mostly inaccurate
The major point or points made are untrue or misleading, even while some aspects of the claim may be accurate
False
The statement is false, or based on false underlying facts

Who: Democratic Governors Association
What: “Seniors,” 30-second TV ad
The call: Regular Foul

Relevant text:

“Governor Snyder decided that he was going to tax my pension. He also raised property taxes on senior citizens. ...He gave his business friends a nice tax break and he gave all us retirees a nice tax hike.”

Rocky Gonet, the Scio Township retiree featured in this ad, frets about his retirement savings following changes to the state tax code championed by Gov. Rick Snyder. “Now, I gotta scramble to make ends meet,” Gonet says, adding, “I don’t know what the future’s gonna hold.”

The claim that Snyder decided to tax pensions is true, as discussed in earlier Truth Squads. Snyder’s 2011 overhaul of the state’s tax code removed an exemption for pension income. Many retirees have complained loudly about their pensions being taxed like any other income, though the blow was softened somewhat by having the change phased in: those born before 1946 saw no change, those born from 1946-1952 get a smaller exemption, and those born after get none. Gonet, 66, falls into the middle group and pays state income taxes on a previously exempt $7,000 portion of his pension, according to a DGA press release.

The claim that property taxes were raised on senior citizens is misleading in that it gives the impression that a change on property taxes was targeted specifically to seniors. The assertion refers to another plank in the tax overhaul, which removed the homestead tax credit – the credit applied to one’s main residence – for households making over $50,000 or for homes with a taxable value of more than $135,000. Many retired Michigan homeowners could fall into this category, but the change wasn’t specifically aimed at them.

The tax changes helped make up for lost revenue from a business tax cut of $1.65 billion aimed at making the state more competitive and attractive to business. Gonet’s claim that Snyder’s “business friends” got a break while “all us retirees” got a hike is only partly true; the oldest saw their pension earnings remain exempt, and the homestead credit was only lost by certain homeowners and those households with more than a $50,000 income.

Sabrina Singh, spokeswoman for the DGA, defended the ad: “While it may be inconvenient for Rick Snyder to admit that his homestead tax credit policy punished seniors trying to get by, it pales in comparison to the burden seniors have been forced to carry because of that change and the Snyder Retirement Tax – all so that he could give tax cuts to companies, even if they ship jobs overseas.”

The call: Regular Foul

Seniors’ anger over the loss of the pension-income exemption is certainly borne out by the facts, though the ad overreaches. Meanwhile, the homestead exemption wasn’t targeted to seniors, as the ad implies, although many will feel it, and it will contribute to the overall tax burden for many of them. The ad receives a foul for overreaching on the pension tax and distorting who must pay added property taxes.

Like what you’re reading in Bridge? Please consider a donation to support our work!

It takes time, money, and hard work to inform Michigan readers and leaders with substantive, in-depth, future-oriented news and analysis. If you value our journalism, please consider a one-time donation or a monthly contribution. It takes just a moment to donate here. Please join the thousands of Bridge readers who are helping grow and sustain our nonprofit, in-depth public service journalism in Michigan.

Pay with VISA Pay with MasterCard Pay with American Express Donate now

Comment Form

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Comments

Snyder Backer
Wed, 09/03/2014 - 10:00am
I recently read that Michigan business taxes in comparison to other states are about in the middle of the pack. Often it has been said that maybe Snyder gave tax breaks to his business friends. However if we are now in the middle of the pack, maybe businesses were paying relatively too much in taxes for many years prior to the current tax structure. So was it really a tax break for business or was it merely bringing business taxes to a more reasonable level compared to other states? If we want to create new and retain current business in Michigan we must have a playing field, including a reasonable business tax structure, that will will be attractive to business owners. And if you have a detrimental business tax structure you can watch businesses leave along with the jobs. Also outsiders will be saying "I don't want to locate my business in Michigan because they tax the heck out of you". We must collect taxes. But in this competitive world the taxes must be reasonable enough so business owners are comfortable in Michigan. If Michigan has that right formula for business the jobs will come along also.
Wed, 09/03/2014 - 8:36pm
Well, shoot...you insert WAY too much logic into this discussion. I call foul...
Nick Ciaramitaro
Wed, 09/03/2014 - 10:42pm
Michigan WAS in the middle of the pact BEFORE the Snyder tax reforms. Now, Michigan"s businesses pay the 3rd lowest percentage of the cost of state and local government of the 50 states. And that's before the personal property cut that will be phased in over the next three years on manufacturing and commercial personal property taxes. See http://www.cost.org/workarea/downloadasset.aspx?id=84767 for the Ernst and Young study. FYI: Though unemployment has come down as a result of the rebound of the auto industry after the Great Recession, it went up in Michigan in July and remains higher than the national average.
Jim
Thu, 09/04/2014 - 8:51am
BS! Still waiting for those jobs. I am sure the Snyder backers are happy though!
Dedra Downs
Mon, 09/08/2014 - 1:35pm
As a retiree I have seen my tax load go up over $3000 a year. I lost my homestead deduction. Businesses need to pay their fair share so the people of Michigan can live a decent life. A tax break for businesses, that I believe can pay more, should not come on the backs of seniors.
Sat, 09/13/2014 - 1:42am
Every small business owner--from the corner beer store to a transportation company owner--tell me that they don't need State tax cuts. They need CUSTOMERS. Increasing the tax burden on seniors, homeowners and the working poor is not only unfair, but it means less disposable income, reduced purchasing power and lower sales.
Jay smith
Sat, 10/18/2014 - 9:45pm
I'm struggling with the math here. The average homestead property tax credit was decreased by about $200. The only other increase was the phase out of tax free pension income. To have an increase of $2800 you would need to be pulling in over a $100k pension. With a 100k pension you wouldn't be able to claim a homestead property tax credit. I feel for you if you are struggling but something doesn't add up here. You might need to hire a good CPA if you believe your taxes have increased by 3k.
Fact checker
Wed, 09/03/2014 - 11:10am
Serious question: who fact checks your fact checkers? Part of these property tax changes did target seniors specifically. In addition to the property tax changes affecting all taxpayers with household income over $50,000 seniors with incomes between $22,000-50,000 were targetted for additional higher taxes. Before Snyder those eligible seniors could take 100% of the credit, non seniors 60%. The Snyder changes targetted and reduced the number of seniors who could claim the full credit. http://www.legislature.mi.gov/(S(3bjuzefioyfdf345jbpz5aqj))/documents/2011-2012/billanalysis/House/pdf/2011-HLA-4361-8.pdf
Conan Smith
Sun, 09/07/2014 - 8:30am
That critique looks accurate, Bridge. Seniors are clearly targeted for a property tax increase, detailed on page 5. That might be a fair policy, but it might also be fair to reconsider this foul.
Steve Dougan
Wed, 09/03/2014 - 11:29am
This doesn't clarify the distinction between 401k plans and pension plans, but I believe the 401k plans (and their various cousins, including IRA withdrawals, 403b plans, 457 plans) were also fully taxable previously. That means that a senior with a pension of $20,000 previously had a better deal than a senior with an IRA withdrawing $20,000 a year.
Ed
Wed, 09/03/2014 - 7:02pm
Steve that would be fair. We can't have fair. As my brother told me, I should have joined a union. I guess if you can't work for the gov or a union you should pay more.
Nick Ciaramitaro
Wed, 09/03/2014 - 10:45pm
Sorry, another misrepresentation. Retirement account withdrawals were given the same tax treatments as pensions under the old law.
Sandy
Tue, 09/23/2014 - 11:53am
Yes, that is true, normal IRA withdrawals made after 59 1/2, and 401K plan withdrawals, where the plan was set up with employer match, are defined as "pension" funds by Michigan, and thus qualify for the exemption.
Ron
Tue, 09/09/2014 - 9:38pm
I'm still amazed Democrats try to spin retired union teachers. Get a spokesperson that is really hurting as we can see thru it. Their hope is un-informed voters don't research. 1). Pension was surely spiked for Rocky and now earning 3% guarenteed yearly pension increase 2). Rocky probably retired early. Therefore he started his own second career paid for by michigan taxpayers. Also moonlighting at community college (http://www.rockygonetphotography.com/67570/about-me/) 3). Rocky's retirement, paid by the state, is the equivalent of a 1.5 million 401k. 401k pension withdrawals are taxed. Rocky shouldn't? 4). Finally, if pension tax is repealed we will still pay taxes in 401k withdrawals and I guess Rocky will be tax free (paid for by all of us with 401k Another union ploy Thanks Rocky
Mark G
Wed, 09/03/2014 - 2:21pm
You missed one: "all so that he could give tax cuts to companies, even if they ship jobs overseas." The statement implies that there is some sort of difference in tax cuts based on whether or not the company ships jobs overseas. As far as I know, there is no such distinction.
Nick Ciaramitaro
Wed, 09/03/2014 - 10:46pm
Exactly the point, businesses that ship jobs overseas were given the same tax cut as businesses that maintained jobs in Michigan.
Indi-K
Wed, 09/03/2014 - 2:40pm
Mark G: "...even if they ship jobs overseas." Does not imply there is a difference in tax status for those companies. It rightly and clearly states that companies have the same tax status "even if they ship jobs overseas." Apparently Rocky feels that companies which export jobs SHOULD be in a different tax status, with higher tax liabilities..
williamkiernicki
Wed, 09/03/2014 - 3:44pm
your all a bunch of liars you republicans want only one thing money money you put it all on the backs of the poor and middle class you cut revenue sharing for townships so bad our drain bill each year is bankrupting our township the road commision is a big joke they answer to no one i really feel sorry for the younger generation remember a back can only hold so much and then it breaks
Bec
Sun, 09/07/2014 - 12:22pm
What you guys complain about is trivial. Snyder has turned Michigan around and is giving a future to Michiganders. It can't always be about you. You have to vote for the good of all of us, not just for your job or your IRA.. I think he should be stricter on some things like welfare, health care.. Make people do something for their welfare like volunteer, help fix the roads, pick up litter.. ect. make themselves be useful and feel better about themselves. But the unions would not like that, because they are unions jobs that they may be doing. Also, why can't we have healthcare that fits our needs. I do not need much but catastrofic(sp) because I hardly have been to the doctor once last year. We are greedy people and lazy people a lot of us. Why should I work when I have welfare? I have a modest income and do fine, make do with what I have, and try to encourage others to start a business, or find a job they like. Concentrate on encouraging others instead of whining and complaining that you make not be able to go out to eat on Saturday. Snyder is a common sense person with accounting skills that are way beyond a lot of us. He knows how to run a business and it is coming around. Unlike Jenni Granholm that destroyed Michigan and our economy. He knows what he is doing and it is for the reason to help all of us. Quit Whining..
Dedra Downes
Mon, 09/08/2014 - 1:41pm
So Seniors don't count as to what's good for all of us. Snyder has not been good for all of us. Michigan has not turned around for all of us. We have lost services and have increased taxes, and that revenue sharing is not sharing at ALL.
Dedra Downs
Mon, 09/08/2014 - 1:56pm
Snyder's computer business went bust. Then he sold it to HP(Hewlett Packard) and together with Carly Fiorina (forgot how to spell her name) they turned a good company with excellent products and excellent customer service into a company with deplorable customer service and not so good products.
Dedra Downs
Mon, 09/08/2014 - 1:59pm
In order to get welfare you have to participate in the Work First program that gets you a job. Problem is the jobs pay so little clients still need welfare. But they do have to work, or be actively seeking work.
Todd Reitz
Wed, 09/03/2014 - 5:07pm
A reduction or removal of a credit is effectively the same thing as a tax increase. Just a difference in terms and application. The point is, Snyder took money away from seniors and lower income people to finance a tax break for businesses. (Where are all those new businesses anyway?). On top of that, the voters were recently fooled into passing Proposal One which gave businesses even more tax breaks on equipment, with no clear means for replacing that revenue.
Joe
Wed, 09/03/2014 - 9:52pm
if he is taxed on $7000 that was previously untaxed (unlike almost all other states with an income tax) at 4.25% rate, that would be $297 per year, or $5.72 per week. Hardly the life changing or not-knowing-how-he-will-make-ends-meet event he suggests as he rides away on his $2000 lawn mower....
Jim
Thu, 09/04/2014 - 8:57am
Your right Joe! I prefer to give a few hundred dollars so that DeVos can get tax breaks!
Dedra Downs
Mon, 09/08/2014 - 1:42pm
Amen
Jim
Thu, 09/04/2014 - 9:09am
Maybe it would be better having the governor's supports drive away in a Mercedes.
Bec
Sun, 09/07/2014 - 11:56am
Thumbs up Joe.. Common sense speaks!!
Carol
Thu, 09/04/2014 - 7:47am
My husband and I... and many like us... have no pension. Throughout our lives, we lived within our means and saved for our retirement. We now live on investments... both taxable and tax-deferred. Both are taxed for any gains made over the years, so our retirement income has always been taxed. I am for equitable treatment. If we are to pay taxes on retirement income, all should. If others are not paying taxes, we should not, either.
Jim
Thu, 09/04/2014 - 9:16am
Except, when the benefit proposed is that the retirement would not be taxed, which allowed for a lower retirement amount. I assume you would be upset with an unknown tax increase.
Dedra Downs
Mon, 09/08/2014 - 1:44pm
Aren't dividends taxed at a lower rate than earned income?
Carol Waltman
Thu, 09/04/2014 - 7:50am
The earlier statement that all retirement income is treated equally is dead wrong. We pay quarterly taxes on our withdrawals from our 401k accounts, as required by law.
LRedmond
Sat, 09/13/2014 - 12:09am
401K's are not retirement income "PENSIONS" they are like a "savings account" that YOU put your own money into earmarked for later retirement. The Government allowed us to use "Pre-tax" dollars to feed that fund and it was explained when you took out your 401K that you would pay taxes on it when you began withdrawing funds.. Social Security checks are still tax exempt in Michigan (not federal).... and Most people in the bracket from 1946 to 52 still pay no income taxes on the first 40,000 of their "Employer Provided" pension. Those who worked for any agency that did not participate in the social security program have the first 55,000 of their pension exempt from state income tax.. EVERYTHING is taxable by the feds...
Larry Stephens
Mon, 09/08/2014 - 11:57am
The whole purpose of IRA's and similar investments is to put away pre-tax dollars now for later withdrawal during retirement years when your tax rate is smaller because you are earning less. Why should we complain when that money is taxed? Furthermore, the point of giving businesses a break is so that THEY WILL NOT BE TEMPTED TO MOVE JOBS OVERSEAS! Lets face it, in a global economy we have no control over where companies choose to do business . . . like it or not. We can only try to make it more attractive to do business here, and hope they will make that choice. Why do you think Michigan's population has flatlined over the last 10 or 15 years? Because the younger generation must go elsewhere for jobs.
Dedra Downs
Mon, 09/08/2014 - 1:48pm
Do you mean the younger generation should go overseas with the jobs? Giving tax breaks doesn't seem to keep businesses here. But Tariffs etc. on goods from overseas would put a stop to that. All we get from overseas is cheap products that aren't up to code, don't last, and many times don't work. They can keep their crap overseas I won't miss it a bit.
Sue
Mon, 09/08/2014 - 8:19pm
No matter how you cut it, I paid over $10,000 additional taxes since Snyder became governor. I support an increase in state income tax which spreads the increase in taxes to all those in Michigan who are currently working. I believe that this reasonable solution does not happen because our governor and too many state senators and representatives were elected on a platform of reducing taxes. I believe that this tax cutting platform is counterproductive to improving the economy in Michigan.
Wagg Dogg
Mon, 09/08/2014 - 10:50pm
Taxes on his Govt pension equates to less than $300 bucks on a $7000 annual pension. Next year his pension COLA (which is paid by tax payers) will more than cover whatever he paid. Watch Snyder repeal this tax next year. (When was the last time DEMs ever repealed a tax) He will do it in an effort to stop pension beneficiaries from taking their pensions out of state to Florida. Just wish he could fix our roads and educate the kids.
Dedra Downs
Tue, 09/09/2014 - 10:46am
How do you know his pension has a COLA? Many/most do not.
LRedmond
Fri, 09/12/2014 - 11:58pm
Tell the rest of the Story.. Rockey Gonet also benefited from the tax cuts given to business..Including the latest elimination of the personal property tax on business... As a Retired Teacher His FIRST 40,000 in Taxes is still exempt his TEACHER pension is 47,000 a year???? AND Teachers are whining about being underpaid???? He is a Professional Photographer and the owner of Rocky Gonet Photo Studio and has the contract with AnnArbor schools for Senior Class pictures.. According to his website he also teaches part time at Washtinaw Community College and his wife still earns 86,000 a year as a AA teacher... all that and His $750,000 home really makes me feel sorry for him.. The World's smallest violin is playing "My Heart Cries For You." As Far as Rocky's World, that commercial is a Flagrant Foul.....
Sandy
Tue, 09/23/2014 - 11:43am
There are many non-unionized white-collar workers who do not have employer defined benefit pension plans and have instead gone into the 401K and IRA model. They do not have "guaranteed by the taxpayer retirement income stream" of public workers, indeed may have had their retirement portfolio devastated by the economic recession. There are many who have even lost their pension through company bankruptcy or mergers. Why exacerbate the inequity of life, be additionally having the tax code benefit the public workers by giving them a full exemption of their public pension from taxes (as was done pre-2012), especially as many have retired early with their public pension and gone on to private sector jobs? I don't care if that was a "promise" made as Jim alluded to in the past that their pension be non-taxed, it is a promise that shouldn't have been made on behalf of the taxpayers who have to fund it, and certainly not in perpetuity. My conclusion is that the only fair kind of tax exemption of pension money should be based on income level. If you are poor (and Rocky is not), you get it.
Mike
Fri, 10/10/2014 - 12:19pm
As far as pension taxes the repub have descrimated by age as to who has to pay and how much, that is the most disgusting part of the pensions and homestead tax increases. But is what is going to happen after this election . The increase in license and registration fees and probably fuel taxes. Instead the repubs should strike a blow for America and double the sale tax on all foreign cars sold in the state. Be American! BUY AMERICAN!
Doug thompson
Sun, 11/02/2014 - 5:37pm
I'm retirement eligible next year. I grew up in Michigan and have worked and paid taxes my whole life here. I am moving as soon as I retire. Michigan can go flush itself down the imperial toilet of thre publican party. They are liars, cheats , and thieves as well. The whole system is broken and it will never be fixed. May God have mercy on us all for allowing this to happen.