Detroit City Income Tax

[iheartthed]

The city's personal income tax made more sense when a much larger proportion of the region's jobs were located in the city, since at the time it incentivised being a resident of the city if you worked there. According to a Freep editorial from last week, Detroit was the location for 40% of the region's jobs as recently as 1970, but that is down to 13% today [[http://www.freep.com/article/2010071...-for-all-of-us).

For the sake of discussion, I personally would advocate either 1) making the resident and non-resident rate the same, or 2) eliminating both. But I also don't think that this tax is a major deterrent for people who are choosing between the city and suburbs. It's probably more like the cherry on top of the icing on the cake.

If the city were to eliminate the personal income tax, I think it should be done with an agreement from the state to make Detroit, or areas within it, some sort of sales tax free zone. But I stress that the income tax ain't the most pressing issue in Detroit right now, IMO.

New York City taxes personal income for residents at an even higher rate than Detroit, and the rate cascades proportional to income, but there is no tax for non-residents. People are going to choose to live in the city for a lifestyle that the suburbs cannot offer. That's what Detroit needs to understand.