Tax Cuts in Michigan to Help Promote Pension Grants

• Author: Kelly Cooke
• Posted: 2023-11-19

Michigan is one of the very Democrat-heavy states per voters that were calling for defunding their entire statewide police force in the wake of 2020's events involving George Floyd and the Black Lives Matter movement. This is a state that went late for President Joe Biden, against former President Donald Trump, despite polling indicating otherwise and having a Republican state house. What this tells people is that the majority of that state was a bit fed up with Republicans and wanted to try their hands with a Democrat in charge. As soon as the fiscal reports started to pour in for 2022, it appeared as if Michigan had wasted billions of dollars and now found themselves in a deep hole. The problem is that the state has bankrupted their pension fund for municipal workers and law enforcement.

If you're wondering about the pensions of elected representatives in that state, who already make more than city workers and police, don't worry too much; nothing is going to get in the way of a politician getting their pension. Though instead of figuring out ways to fund their pension entirely, Michigan is instead deciding to hand out grants to retirees who cannot afford to live due to receiving a reduced pension or no pension at all.

This was just proposed by the state on Thursday, Feb 24, and so it hasn't had a lot of time to make the rounds yet. Even still, its limited exposure has received some very harsh blow-back, with critics wondering why politicians' pensions are still 100% funded yet they need to hand out grants to men and women who actually served their community. The truth is that things are a huge mess in Michigan. Their Republican-majority State House is in a constant fight with the minority Democrats who are trying to defund police and protect their Governor, Gretchen Whitmer, who the Republicans want to bring up on criminal charges for how she handled COVID and lock-downs.

As one might imagine, there wasn't very much attention paid in the state to pension funds. Everything was always a heated battle over power and posturing. The end result is thousands of retired seniors who are getting robbed against their contracts with the state, and Republicans and Democrats finally coming together to place a band-aid on the wound.

The Curious Case of Mishandled Pensions

All over America, and even all over the globe, politicians use money promised to the retirement funds of public employees (except politicians) as political capital, while treating it as money to burn. The thought process here is that the money will just be replaced. However, when there's an inept government spending more money than it's able to take in, you find a situation as with Michigan now, and even like Greece a decade ago. Flat broke and begging the private sector to make up the shortfall. Michigan's plan is to offer huge tax cuts to incentivize businesses coming in and opening up, which the state hopes will greatly increase tax revenue overall. Instead of taking $100 from one person, for instance, take $10 from one hundred people. This, coupled with matching grants, should any money be raised, is the state's way of fixing a problem they caused.

As far as the exact dollar amount of these grants, this isn't set in stone yet. What's most likely to happen with any sort of proposal like this is that the government will custom-tailor a grant to a specific need. In other words, a struggling retiree will have to apply for a grant, and the government will end up giving them just what's needed to cover their costs, at best. This way, the government still has enough money to hand out more grants, and probably to fund other pet projects. Never in the history of governments existing has a spending bill only spent money on its main target. There's always some pork and earmarks in there, which ironically is what creates these messes in the first place.

Private Citizens Get No Such Luck

Once a government employee retires from the workforce, they're considered a private citizen, and any money they've been promised is entirely up in the air and at the whims of the serving government. This is not the case for politicians, however. Once they retire, or get voted out of office, they're treated like royalty, and the governments will borrow money or even print it out of thin air in order to ensure that politicians are paid every penny they're owed, adjusted for inflation every year.

So while these grants in Michigan will end up being better than nothing, seniors will not forget the fact that they're treated like second-class citizens compared to people who are supposedly their elected representatives.