Last week the Michigan Supreme Court held hearings on the constitutionality of two budget proposals that amount to tax increases, one on high-earning state residents and the other on the pensions of former public employees. The new taxes were part of the budget for FY 2012
“„During Wednesday’s oral arguments at the Hall of Justice, the court had Attorney General Bill Schuette’s office argue both sides of constitutional issues Snyder has asked to be resolved before the plan takes effect Jan. 1.
“„That made for some odd moments.
“„Deputy Solicitor General Eric Restuccia, said applying different tax treatments to taxpayers based on income is unconstitutional. Solicitor General John Bursch, second only to Schuette in the office, argued that since the Snyder package doesn’t apply a higher tax rate to higher levels of income, it’s not a graduated tax and thus OK.
“„The main question for last week’s hearing was presumed to have been the issue of whether the state can apply the income tax to the pensions of retired public employees. Employee groups argue it’s an unconstitutional impairment of those pension benefits.
“„In the arguments Wednesday, justices didn’t show much interest. Perhaps that’s because the issue had been thoroughly briefed. Or maybe its because the court’s Republican majority doesn’t have a problem with it.
“„But judging from the questioning, justices did have issues with the personal exemption cutoff, and the position that the constitution’s framers really did allow the Legislature to tax upper-income households more thoroughly than lower-income households.