Originally Posted by
Huggybear
It's actually pretty entertaining to hear an argument like #1 below because it suggests this argument [[or arguments): "Detroit has been losing residents for years. Most of the suburban communities have [fewer minorities/drainage ditches instead of storm sewers/white-painted curbs/strip malls]. Therefore, Detroit should [be racist/dig up the storm drains/paint the curbs white/replace streetside retain with strip malls]." You're falling into the classic fallacy of fixating on one variable - a close cousin of the old "y happened after x; therefore, x caused why."
The first variable I would try to eliminate, before concluding that income taxes mean anything, is the social norm that was created in which "white people live in the suburbs and black people live in the city." Let's connect the dots.
1. World War II hauls hundreds of thousands of rural southern whites to a segregated Detroit.
2. Race riots occur in 1943.
3. World War II ends and baby boom commences. All of a sudden, Detroit is bursting at the seams, and 900 sq ft bungalows now house families of five or more.
4. The federal government begins subsidizing loans for GIs. Loans are in undeveloped suburban areas. The GIs are predominately white, basically everyone who was an able-bodied white men from 1942-1945. At the same time, banks are redlining non-whites.
5. The United States Supreme Court rules in Shelley v. Kraemer, effectively ending the use of restrictive covenants that were used to keep Detroit segregated. Brown v. Board of Education follows, eliminating school segregation.
6. The federal and state governments begin building a massive infrastructure of interstate and state highways that allow the people who were able to buy houses in the suburbs to separate themselves from cities and get to more spacious suburban homes.
7. Congress passes the Civil Rights Act of 1964, ending [[at least on paper) most types of racial discrimination.
8. Detroit proceeds to lose one million people between 1952 [[peak population) and the 1970 census [[this entire period under white mayors). The 1967 riots did not, per stats released in 2007, cause any appreciable increase in depopulation.
9. The city continues to lose population through the 1980s, a period when both city government and the schools were still functional.
I combine this with my own experience, which was that the first I ever heard of the income tax was overhearing office workers bitching about being transferred downtown. Until then, among outgoing Detroit residents, it had been a discussion that centered around "safety," and "property values," both of which are proxies for you-know-what. From all of this, I have concluded that the city's downfall was due to some combination of [[1) small houses and lots and [[2) a pretty serious racial animosity, fueled by fear and enabled by subsidization, that changed social norms first among the white population and then the rest of the middle class. On the second point, I'll put it out there that people don't live in Detroit because they have a gut reaction against it that doesn't stop to ask whether the income tax is higher or not.
I think that if you sat down, did a survey, and plotted among Baby Boomers, Generation X and Generation Y the elasticity of demand for living in Detroit, you would find that the cost of living reduction needed to induce an average person in this area to live and work in Detroit would be far greater than 2.5% of his or her income. I think you'd find that the reduced water and sewerage costs [[for a lot of people equal to the city tax) would be meaningless - as would the absolute-dollar reduction in property taxes. The difference, among people who due to age or circumstances are not in the market for public-school education, would represent the influence of the intangible "norm."
I think the single best piece of evidences that taxes have zero to do with the issue is that there were Enterprise and Renaissance zones left on the table during the Clinton and Bush administrations. These did not represent trivial, 2.5% changes in taxation. These were big cuts across multiple types of taxes, even for corporations and people who did not have kids in school [[eliminating that from the discussion of "why not"). But they never got near their potential. According to what has been postulated here about lower taxes meaning more investment, they should have been overrun.
The basic "white/middle class people don't live there" mentality is so toxic and internalized that you have at least one entire generation [[Generation Y and beyond) that sees cities [[well, at Detroit) as undesirable, that reflexively calls Detroit "the ghetto" and practices a type of studied financial illiteracy to make a monetary case [[or, more precisely, to justify that of their parents).
As long as all of this is going on, Detroit will be recruiting from outside the area and a small group of Gen X and Gen Y people who remembered what it was like when it was functional and are trying to get it back there. It some ways, it may be better to stop proselytizing suburbanites. The best you get from that is the threadbare "oh, we looked at places in the city but couldn't find a housue we liked." Instead, Detroit needs to do what Buick is doing and recruit elsewhere, the same way Buick can sell in China, where there is no emotional baggage of the 1970s U.S. auto industry.