Reducing or eliminating Detroit's city income tax

[313WX]

When I worked in Detroit, the distaste for paying Detroit Income Tax is deep. It may not be the biggest problem Detroit faces, but it is a problem.

It wasn't the fact that you were paying an income tax that you disliked [[I'm sure you pay your state and federal income taxes without a problem), but the fact that you weren't getting your money's worth for the income tax you paid that you disliked, which is understandable.

I would feel jipped too if I had to pay an income tax to live or work in a place where blight, disvestment and crumbling infrastructure is the rule.

That said, the solution shouldn't be to eliminate one of Detroit's only means of generating revenue without another revenue stream in place. Instead, the solution should be to work towards giving people their money's worth for the income tax they're paying.

[DetroitPlanner]

Detroit was well on its way to reducing the income tax to 1.5% for residents and 0.75% for non-residents as part of the deal that brought casinos to town. And additional revenue sharing. Under Engler revenue sharing started to be cut and this continued under Granholm. Mayor Kilpatrick cried broke and a deal with the state was accepted by Gov Granholm.
http://bridgemi.com/2013/03/handshak...aunts-detroit/

[EastsideAl]

All sorts of major cities around the country have an income tax, yet some people in this area act like its some crazy thing unique to Detroit [[or something relatively new, but it goes back to 1962, well before they can blame it on Coleman Young). But the major government-related factor in dissuading business in Detroit is actually not the income tax, it is the lack of decent city serivces, the difficulties of dealing with undermanned departments, and the high licensing, etc. fees charged to businesses.

It's hard to see how a reduction in income taxes is going to do anything but make those things worse, particularly with the fallining property tax revenue from residences. It takes, and will always take, considerably more money to run a large city than a small suburb. If anything, the situation suggests that Detroit's tax rate should actually be a little higher, since then there would be more funds to allay some of these difficulties. Especially since the largest city and center of commerce in the state is certainly not going to ever be able to count on much money [[or even the money we once got, or for that matter the money we're owed) from our friends in Lansing.

[ABetterDetroit]

The big problem with municipal income taxes is they chase away prosperous citizens, leaving mostly low income and government supported ones. If there was not an income tax you would most likely see the housing in areas like Rosedale Park, Boston Edison, and Indian Village be triple the value they have now. The city would very likely come out ahead on the property taxes. Here is one more adder to the equation. These citizens are more likely to pay their taxes.

If you look at the difference in the streets straddling Alter Road it is quite clear the houses in GP Park are well kept up vs. the burned out hulks on the Detroit side. Essentially the houses are about the same age and construction.

The property tax rate is a far bigger problem than the income tax. Triple in value? A 300k house is currently taxed at $10266 a year. The exact reason it is very difficult for even the nicest residential property's to appreciate.
https://treas-secure.state.mi.us/pte...TEstimator.asp

[trstar]

The income tax is merely a red herring of the main problems facing Detroit.

I would even consider staying in Detroit if I could get an affordable insurance policy on my vehicle. I'm not fortunate enough like many of the "Yuppies" in downtown/midtown to have parents or relatives with a suburban address that I can use to get cheap auto insurance...

Trust me, many current Detroiters have a "relative" with a suburban address.

[sypo]

Trust me, many current Detroiters have a "relative" with a suburban address.

I do. The city increased my property taxes 1000% and had me paying more than anyone in my neighborhood. I fought for five years with minimal progress so "moved" to the suburbs to reduce income taxes and fund my property taxes.

The needed solution is complete tax reform. Eliminate the income tax on city residents only to motivate people who work in the city to move in. Change the property tax to be based on objective measures like land acreage and square footage. Eliminate use of tax incentives.

The income tax is a disincentive to live in the city and I know at least a dozen people who considered living in the city but decided against it because of it. I am glad to see this thread on the issue.

[313WX]

Trust me, many current Detroiters have a "relative" with a suburban address.

True.

But the reason I specifically mentioned those who are living in downtown/midtown is because they're the biggest cheerleaders of the city's comeback, yet many of them probably don't even claim the city as their primary residence to avoid the high rate of insurance...

[Willi]

If Duggan was really smart - he would seek out those attempting to start a business in the D.
Inquire about the trials tribulations , the hindrances, the pitfalls of getting started.
Find the businesses that didn't exist 5 years ago and talk to the owners.

Eliminate the bottlenecks, streamline the process and make it a bit more enjoyable
to bother with the red tape of getting something off the ground in the D.

Not everyone has the deep pockets of Gilbert, Ilitch, Taubman, etc., etc. and they need
good solid reasons why it makes economic sense to look with the borders of the D

[Cliffy]

If they changed the income tax to Detroit to 0, it would not do anything to bring people in with all the problems that we have talked about nonstop. Nobody is saying "I'm not moving to Detroit because of income tax".

[Wesley Mouch]

It wasn't the fact that you were paying an income tax that you disliked [[I'm sure you pay your state and federal income taxes without a problem), but the fact that you weren't getting your money's worth for the income tax you paid that you disliked, which is understandable.

I would feel jipped too if I had to pay an income tax to live or work in a place where blight, disvestment and crumbling infrastructure is the rule.

That said, the solution shouldn't be to eliminate one of Detroit's only means of generating revenue without another revenue stream in place. Instead, the solution should be to work towards giving people their money's worth for the income tax they're paying.

No, the problem isn't that I didn't think I was getting 'my money's worth' -- the problem was that the tax was/is a disincentive to Detroit.

Sure, I understand that Detroit needs cash. But why does not Inkster or Mt. Clemens need that tax revenue just as much.

City tax is a bad idea. If Detroit has disproportionate costs, then that's a problem that should be addressed. Papering it over with a bad tax is not a good idea.

[313WX]

No, the problem isn't that I didn't think I was getting 'my money's worth' -- the problem was that the tax was/is a disincentive to Detroit.

Sure, I understand that Detroit needs cash. But why does not Inkster or Mt. Clemens need that tax revenue just as much.

City tax is a bad idea. If Detroit has disproportionate costs, then that's a problem that should be addressed. Papering it over with a bad tax is not a good idea.

Would you pay a city tax to work in NYC or San Francisco?

Do you think it's a bad idea for the US and state of Michigan to levy an income tax?

[Hermod]

Change the property tax to be based on objective measures like land acreage and square footage. Eliminate use of tax incentives.

My "libertarian view of the property tax is that the assessment should be subject to "instant challenge" in that when the owner receives a formal assessment from the city/county, he should then be able to say to the city, "okay, I accept" and the city/county has to buy the property for that amount or reduce the assessment to the level at which the property owner is not willing to sell the property for. Utopian, but sure would keep the assessors honest.

[Gpwrangler]

If they changed the income tax to Detroit to 0, it would not do anything to bring people in with all the problems that we have talked about nonstop. Nobody is saying "I'm not moving to Detroit because of income tax".

Amen. Taxes like GP without services = just buy a fixer upper in GP

[Wesley Mouch]

Would you pay a city tax to work in NYC or San Francisco?

Do you think it's a bad idea for the US and state of Michigan to levy an income tax?

I have paid resident & non-resident taxes to Detroit for many years. I personally have no problem with local income taxes.

Detroit tax chases people away from Detroit. Royal Oak has no such tax, so it is a disproportionate tax on a population with a lower average income. It works against the goal of employment in the City.

I'd be fine with a regional tax. Fairness the goal.

[Cliffy]

I have paid resident & non-resident taxes to Detroit for many years. I personally have no problem with local income taxes.

Detroit tax chases people away from Detroit. Royal Oak has no such tax, so it is a disproportionate tax on a population with a lower average income. It works against the goal of employment in the City.

I'd be fine with a regional tax. Fairness the goal.

I don't even know where to begin with this so I'm not going to bother.

[313WX]

I have paid resident & non-resident taxes to Detroit for many years. I personally have no problem with local income taxes.

But yet you seem to have a problem with Detroit specifically levying an income tax...

Detroit tax chases people away from Detroit. Royal Oak has no such tax, so it is a disproportionate tax on a population with a lower average income.Royal Oak has no such tax, so it is a disproportionate tax on a population with a lower average income. It works against the goal of employment in the City.

Except for you, I don't know of anyone who fled Detroit because of the income tax. Usually, the reason people give is poor schools, the lack of services or the high rate of crime. But using that logic, people and jobs should also be fleeing NYC and San Francisco if levying an income tax is what chases people away...

I'd be fine with a regional tax. Fairness the goal.

Fair how? Using your logic, wouldn't the regional tax then chase people and jobs from the region because of the "deep distaste" people who commute from Canada, up north and Ohio into the region for work would have for paying it?

Also, given that this "regional tax" would cover several communities and counties that are independent from each other, in exactly what way do you think would be "fair" to distribute this money?

Furthermore, nothing's stopping neighboring suburbs from convincing the state of Michigan to give them permission to levy their own income tax, if they don't think it's "fair" that Detroit can levy a tax but they can't.

[maverick1]

But yet you seem to have a problem with Detroit specifically levying an income tax...



Except for you, I don't know of anyone who fled Detroit because of the income tax. Usually, the reason people give is poor schools, the lack of services or the high rate of crime. But using that logic, people and jobs should also be fleeing NYC and San Francisco if levying an income tax is what chases people away...



Fair how? Using your logic, wouldn't the regional tax then chase people and jobs from the region because of the "deep distaste" people who commute from Canada, up north and Ohio into the region for work would have for paying it?

Also, given that this "regional tax" would cover several communities and counties that are independent from each other, in exactly what way do you think would be "fair" to distribute this money?

Furthermore, nothing's stopping neighboring suburbs from convincing the state of Michigan to give them permission to levy their own income tax, if they don't think it's "fair" that Detroit can levy a tax but they can't.

Good points. My only beef with the city income tax 1. the service I get back in return for paying it and 2. the city never giving me a refunds when you've overpaid. The property tax is a much bigger problem than income tax.

[Wesley Mouch]

But yet you seem to have a problem with Detroit specifically levying an income tax...

No problem with Detroit's income tax -- except that its a disadvantage to Detroit's job market.

Except for you, I don't know of anyone who fled Detroit because of the income tax. Usually, the reason people give is poor schools, the lack of services or the high rate of crime. But using that logic, people and jobs should also be fleeing NYC and San Francisco if levying an income tax is what chases people away...

I did not flee to avoid the tax. And I don't think its a make/break issue. Just a disincentive.

Fair how?

Why is it Detroit needs a tax, but Livonia doesn't? Because Detroit is carrying costs that are mostly not the individual burden of its current residents, but the aggregate cost of carrying surplus infranstructure that was for the benefit of persons dead or living elsewhere.

Using your logic, wouldn't the regional tax then chase people and jobs from the region because of the "deep distaste" people who commute from Canada, up north and Ohio into the region for work would have for paying it?

Also, given that this "regional tax" would cover several communities and counties that are independent from each other, in exactly what way do you think would be "fair" to distribute this money?

Furthermore, nothing's stopping neighboring suburbs from convincing the state of Michigan to give them permission to levy their own income tax, if they don't think it's "fair" that Detroit can levy a tax but they can't.

Any tax is a disincentive. Its that simple. Don't read too much here. And don't take it to extremes. It doesn't kill -- its just a disincentive. To succeed, we should remove disincentives whenever possible. Simple. And not the biggest issue.

[thoro]

No problem with Detroit's income tax -- except that its a disadvantage to Detroit's job market.
I did not flee to avoid the tax. And I don't think its a make/break issue. Just a disincentive.
Why is it Detroit needs a tax, but Livonia doesn't? Because Detroit is carrying costs that are mostly not the individual burden of its current residents, but the aggregate cost of carrying surplus infranstructure that was for the benefit of persons dead or living elsewhere.
Any tax is a disincentive. Its that simple. Don't read too much here. And don't take it to extremes. It doesn't kill -- its just a disincentive. To succeed, we should remove disincentives whenever possible. Simple. And not the biggest issue.

I agree with you. Someone has a choice between Seattle and Detroit. Factor in our ridiculous insurance rates [[home and auto), state and city income taxes,,,,,.,Wa has no state tax, the corruption and crime, lack of city services, weather. Some of these you can live with but you have to admit they are factors. And lastly the school system. You have to send your kids to a private school.....that's expensive.
I live here and like it. However, if I were young again and offered identical employment in Seattle....I'd probably take it.
Personally, I would like to see some city services for my tax $. Frankly, Detroit should be ashamed having the nerve to charge an income tax giving nothing in return.

[313WX]

I agree with you. Someone has a choice between Seattle and Detroit. Factor in our ridiculous insurance rates [[home and auto), state and city income taxes,,,,,.,Wa has no state tax, the corruption and crime, lack of city services, weather. Some of these you can live with but you have to admit they are factors. And lastly the school system. You have to send your kids to a private school.....that's expensive.
I live here and like it. However, if I were young again and offered identical employment in Seattle....I'd probably take it.
Personally, I would like to see some city services for my tax $. Frankly, Detroit should be ashamed having the nerve to charge an income tax giving nothing in return.

That sentiment is completely understandable.

But the problem isn't the income tax, and the solution shouldn't be to abolish a stream of revenue the city desperately needs to function without a plan to replace it.

Instead, the solution should be to come up with ways to improve city services, reduce crime and improve the schools, which are the real problems, so that you are getting the best bang for your tax dollars.

If someone has a solution, or solutions, to fix these problems, I'm all ears...

[[the weather obviously can't be controlled)

[Willi]

A fairly easy way to see how Detroit is represented financially

Look on the far LEFT hand side
- under Citizens Guide
--- click on Where the money comes from

http://www.munetrix.com/Michigan/Mun...y/City/Detroit

[sumas]

Maybe you should have lived in the 7th precinct. Response excellent, EMS superb.