County Sales Taxes to help Detroit A change in the State constitution will allow Mich

[That Great Guy]

A change in the State constitution will allow Michigan's Counties to impose a Sales tax, in addition to the State Sales tax already in place. This could pay for many regional services and help lower the city taxes in Detroit to attract more residents. So, what are your thoughts on this?

[Al Publican]

What is the Detroit "business tax" about that I heard was doubled some months ago? I lived in Detroit for decades until ten years ago and I'm not familiar with a city "business tax." Is it a flat annual fee type tax or is it based on gross profits of a business?

As for the city "income tax" that should be eliminated as soon as possible. The city "income tax" was conceived in the '60s when Jerry Cavanagh was mayor, if I recall right. Very few cities around the country have a resident income tax. Philadelphia probably had the highest at one time around 6%. Detroit's topped off at 3% for residents, 1.5% for non-residents working in Detroit. What is the city income tax rate today?

[jbd441]

What is the Detroit "business tax" about that I heard was doubled some months ago? I lived in Detroit for decades until ten years ago and I'm not familiar with a city "business tax." Is it a flat annual fee type tax or is it based on gross profits of a business?

As for the city "income tax" that should be eliminated as soon as possible. The city "income tax" was conceived in the '60s when Jerry Cavanagh was mayor, if I recall right. Very few cities around the country have a resident income tax. Philadelphia probably had the highest at one time around 6%. Detroit's topped off at 3% for residents, 1.5% for non-residents working in Detroit. What is the city income tax rate today?

Saginaw had one in the 70's when I worked there. Also NYC still has a city tax.

[MikeyinBrooklyn]

Aside from the reduced effective income for the resident/worker in Detroit, I think the city income tax is a massive mental block for both potential residents and businesses considering locating in the city [[they are reducing their employees take-home pay by opening in the city). The income tax is the first tax I would get rid of if I could. The sales tax has many pluses going for it, but if only Wayne County raised it, I think it would hurt retail- especially on more expensive items- throughout the county. Stores in Detroit and throughout the county would lose the business of people spending a lot of money, and not just the rich. People buying furniture, Christmas shopping, getting ready to have a baby, etc spend lots of money in short periods of time. They would save money by crossing the county line and shopping in Oakland, Macomb or Washtenaw. If there was a regional increase to, say 7%, the revenue could be divided between the RTA, the counties, Metroparks, and the municipalities.

[jbd441]

A change in the State constitution will allow Michigan's Counties to impose a Sales tax, in addition to the State Sales tax already in place. This could pay for many regional services and help lower the city taxes in Detroit to attract more residents. So, what are your thoughts on this?

Was curious to know if voters in the county would have to ok the surtax and if so how much could the county [[voters) ok? 1% 2% .5%. And once voted in or made law there is no getting rid of the surtax. The counties would become too dependent on it. Also the surtax would follow you online to any purchase where the merchant charges sales tax. Vehicles sales would also be subject to the surtax regardless of what county in Michigan you bought the vehicle in.

[Al Publican]

jbd441, is NYC's tax a sales or income tax or does it have both? In conversations with folks, I find there is often confusion over state sales taxes and state income taxes. While living in California in recent years counties I noticed that sales tax varied by county with some combined state and couny sales tax rates approaching or at around 10%.

[mwilbert]

http://taxfoundation.org/article/loc...isdiction-2011

NYC is shown as 2.907 to 3.876%. Same for residents and non-residents employed in the city. 2.907% - 3.876%2.907% - 3.876%

[jbd441]

jbd441, is NYC's tax a sales or income tax or does it have both? In conversations with folks, I find there is often confusion over state sales taxes and state income taxes. While living in California in recent years counties I noticed that sales tax varied by county with some combined state and couny sales tax rates approaching or at around 10%.

City sales tax I believe amounts to 4.5%? Don't know for sure the percentage for the city's personal income tax. I know it's not too much and I know there are no deductions.

[professorscott]

Was curious to know if voters in the county would have to ok the surtax and if so how much could the county [[voters) ok? 1% 2% .5%. And once voted in or made law there is no getting rid of the surtax. The counties would become too dependent on it. Also the surtax would follow you online to any purchase where the merchant charges sales tax. Vehicles sales would also be subject to the surtax regardless of what county in Michigan you bought the vehicle in.

Well, since we are talking about pie in the sky here, anything at all is conceivable. It is not certain that the Michigan Constitution actually prohibits local-origin sales taxes, but enough people think so that any attempt to implement such a tax without an amendment would likely be tangled up in the courts for years. So, as a practical matter, such a thing requires an amendment.

Nobody has actually proposed such an amendment. Other states have had this for decades, though, and it comes in many different flavors. Some places require a vote of the public and others do not; some restrict the use of the funds thus raised for specific purposes and others do not; it goes on and on.

If anyone actually proposes any specific amendment - and I have not heard any move in that direction from anyone in Lansing - then we can debate particulars. Until then we are building unicorns in our fantasies, and getting to particulars will be like nailing Jello to a wall.

[D_Town]

Doesn't DC income taxes range from 4% to almost 9%?

[That Great Guy]

Well, since we are talking about pie in the sky here, anything at all is conceivable. It is not certain that the Michigan Constitution actually prohibits local-origin sales taxes, but enough people think so that any attempt to implement such a tax without an amendment would likely be tangled up in the courts for years. So, as a practical matter, such a thing requires an amendment.Nobody has actually proposed such an amendment. Other states have had this for decades, though, and it comes in many different flavors. Some places require a vote of the public and others do not; some restrict the use of the funds thus raised for specific purposes and others do not; it goes on and on.If anyone actually proposes any specific amendment - and I have not heard any move in that direction from anyone in Lansing - then we can debate particulars. Until then we are building unicorns in our fantasies, and getting to particulars will be like nailing Jello to a wall.

This is being considered to rebuild our aging infrastructure for sewers, roads, maintaining our transportation system. Many want this because they think it is more fair then property taxes because everyone and tourists pay. I think if it is the same for every county and the money is spent wisely in a way to attract jobs that it would be fair. This could be the answer for Detroit to lower taxes as the suburbs would share in the costs for maintaining essential services. Thank you for your thoughts on this so far. What do you think of this now?

[313WX]

Aside from the reduced effective income for the resident/worker in Detroit, I think the city income tax is a massive mental block for both potential residents and businesses considering locating in the city [[they are reducing their employees take-home pay by opening in the city). The income tax is the first tax I would get rid of if I could. The sales tax has many pluses going for it, but if only Wayne County raised it, I think it would hurt retail- especially on more expensive items- throughout the county. Stores in Detroit and throughout the county would lose the business of people spending a lot of money, and not just the rich. People buying furniture, Christmas shopping, getting ready to have a baby, etc spend lots of money in short periods of time. They would save money by crossing the county line and shopping in Oakland, Macomb or Washtenaw. If there was a regional increase to, say 7%, the revenue could be divided between the RTA, the counties, Metroparks, and the municipalities.

The problem with a county/regional sales tax is a matter of deciding who gets the biggest share of the funds.

You think the rest of the Metro area will allow Detroit [[which now only makes up ~15% of the Metro area's population) to not only dictate the rules of this sales tax, but allow majority of the generated revenue to go towards the city?

The goal after all is to help cash-strapped Detroit. A Regional/County sales tax would not do this.

I still like the idea of a city sales tax [[like most other major cities have imposed across the country with success), with perhaps a cap on, say, $1,000 or $5,000 purchases to not impact the big sale items such as furniture, vehicles, etc.. There's no reason why the tickets sports fan buy, the stuff people buy at restaurants, places such as Rite-Aid/CVS/Meijer/Walgreens can't have a 3% tax imposed on them [[in addition to the state sales tax).

[iheartthed]

If the sales tax is meant to help Detroit then why not just let Detroit implement it?

[Scottathew]

You think the rest of the Metro area will allow Detroit [[which now only makes up ~15% of the Metro area's population) to not only dictate the rules of this sales tax, but allow majority of the generated revenue to go towards the city?

I would support a 1% or less sales tax in the tri-county area to fund a regional transit system. I do worry about how it would effect retail near county lines though, it might kill some businesses if everything was cheaper just across the road.

[313WX]

I would support a 1% or less sales tax in the tri-county area to fund a regional transit system. I do worry about how it would effect retail near county lines though, it might kill some businesses if everything was cheaper just across the road.

An RTA would be best supported by a milleage similar to the DIA, in my opinion.

Any Sales Tax revenue shold go into the general fund for service delivery.

[MikeyinBrooklyn]

One thing I perceive to be an advantage to a sales tax [[versus a millage) is that it tends to follow the economy. When there is less money spent- because people have less money- the revenue goes down. That allows governments [[at least in theory) the ability to adjust spending throughout the year. Property taxes provide steady revenue in theory only, but at the end of the year, when the economy dips, there is a lot less property tax revenue.

[Scottathew]

An RTA would be best supported by a milleage similar to the DIA, in my opinion.

I agree that a milleage would be much better for an RTA.

[MikeyinBrooklyn]

I am troubled that every mill we assess makes home ownership just a little harder. But I am all for funding the RTA adequately somehow.

[Vic01]

You think the rest of the Metro area will allow Detroit [[which now only makes up ~15% of the Metro area's population) to not only dictate the rules of this sales tax, but allow majority of the generated revenue to go towards the city?

Absolutely not, never gonna happen.

As for the "This is being considered to rebuild our aging infrastructure for sewers, roads, maintaining our transportation system"... that means throughout the entire Region with no special funding for any one city, or project.

Also, I'm not sure how this would "lower the city taxes in Detroit"?

[jiminnm]

jbd441, is NYC's tax a sales or income tax or does it have both? In conversations with folks, I find there is often confusion over state sales taxes and state income taxes. While living in California in recent years counties I noticed that sales tax varied by county with some combined state and couny sales tax rates approaching or at around 10%.

NYC sales tax is 8.9%, 4% for the state, the rest for the city.

[GP For Life]

A change in the State constitution will allow Michigan's Counties to impose a Sales tax, in addition to the State Sales tax already in place. This could pay for many regional services and help lower the city taxes in Detroit to attract more residents. So, what are your thoughts on this?

This is a terrible idea. Though, it does give me an idea. A tax on food stamp benefits inside the city limits!

[jerrytimes]

A change in the State constitution will allow Michigan's Counties to impose a Sales tax, in addition to the State Sales tax already in place. This could pay for many regional services and help lower the city taxes in Detroit to attract more residents. So, what are your thoughts on this?

It would make me avoid going to Detroit as much as I could. I am 100% against this. They can't handle their finances and they want to tax people to fix it. Screw that.

[downtownguy]

This is a terrible idea. Though, it does give me an idea. A tax on food stamp benefits inside the city limits!

Classy.
...

[Wesley Mouch]

Money is tight. But money isn't the problem.

Before Detroit or Wayne County get more money they need to clean up their messes -- pension reform, hiring practices, and efficient government.

I'm not impressed yet.