How many "teabaggers" voted for the current taxation system in Detroit?
As far as the state is concerned, legislators from rural [[and poor) counties are reluctant to raise taxes on their constituents to pour down the "rathole" in Detroit.
Michigan income taxes are [[as i recall) 4.8% flat rate on income after generous personal exemptions. If you are a millionaire baseball player or rock star, you only pay 4.8%. If, on the other hand, you have been frugal with your money and invested wisely, you pay "intangibles tax" of 3.5% over and above the 4.8% income tax on your corporate dividends.
Quick question on this. The homestead property tax rate in Detroit is 68.44 mills as of 2013 and the non-homestead rate is 86.62 mills.* How is that not a tax on rent? Not a sales tax, more like a gouging in the fine print. The landlord will pass on the higher cost of the property tax to the tenant.
*
https://treas-secure.state.mi.us/pte...testimator.asp
Do you own a home in Michigan?
If you do then you have been #%&*ed over by screwed up property taxes in the whole damn state as well. They use your hate against you, while your getting THOUSANDS of dollars lifted out of you wallet in taxes and NEVER to be seen capital gains on the value of your home they whisper in your ear "at least your not in the rat hole" and your dumb enough to feel good about it.
My aim, fellow Canadian, was not to offend you but to point out that far too many neo-Cons north and south of the border use place like Detroit as an example of everything that's wrong with unions and liberalism. Do you think Toronto would have fared any better if the large financial institutions that made Toronto the center of Canadian finance deserted it for Calgary? What if most of the city's population had followed the firms and what was left was a bankrupt, destitute city full of people who didn't have the resources to leave for a better life. Do you think the editorial board of The National Post cares or wants to know what happens when an entire population becomes disposable, which is what happened to the auto workers in Detroit? Only if it proves to themselves that unions and big government are the problem and that free markets are the answer.
If you google "Michigan property tax reform" you get we already had it. Lucky us.
http://www.tax-rates.org/taxtables/p...y-tax-by-state
You can't compare Toronto to Detroit. Toronto has 2.8m people, while Detroit has half a million.
Let's compare Detroit to a bordering city like Windsor where the property tax rate in Windsor is almost three times higher than Toronto.
The 2014 City tax rate in Windsor was 1.64% and education was 0.203% bringing it to 1.84% [[not 0.72% like in Toronto). http://www.citywindsor.ca/cityhall/T...Tax-Rates.aspx
So, on a $500,000 house in Windsor [[and there's lots of them in South Windsor--Gundy Park has multimillion dollar houses on tiny lots) the taxes were $9,232.03 in 2014 in Windsor vs. $3,615.04 in Toronto.
To top it off, mortgage interest on a $500,000 house is not tax deductible from your income taxes like in the US. So you get burned again.
Then, you pay about $1.20 more per gallon of gas in Ontario because of higher gas taxes [[which means all your consumer goods has to cost more to cover the higher transportation costs).
And in addition to the 13% sales tax in Ontario, there's also an ecotax on a lot of goods such as tires, electronics, etc. I bought a $12 recording device that ended up being $19 with sales tax and ecotax. A huge tax on big screen tvs. Buy a new car and there's often a gas guzzler tax. We're also forced to heavily subsidize environmentally friendly power generation like windmills and solar panels through higher hydro rates. It's a f'in ripoff living in Ontario with all our taxes. From a tax perspective, you're much better off living in the US if you're a high income earner. Granted, gun crime is a lot lower, but it still doesn't justify paying the higher taxes.
I did some research and you are right. I have just been cleaning out stuff in my storage room and reviewed the tax returns for my mother's estate in Michigan 1990-1995 where I was filing Michigan income and intangibles taxes on the estate. In the last twenty years it must have changed because only businesses are taxed on intangibles now [[stocks, bonds, receivables, cash on hand, etc). The intangibles tax on individuals used to be 3.5% of income or 1/10th of 1% on value [[whichever was greatest) for each line item.
Detroit's property taxes are ridiculously high. They are about 25% higher than Grosse Pointe, and twice as much as rural locations.
Detroit's "solution" to a declining tax base was to keep pushing the rates up. [[For the Canadians on the board, state law allows municipalities to set local taxes, for the most part.) This was not unique to Detroit; Ecorse, Inkster, River Rouge and Ypsilanti have similarly high rates.
http://www.michigan.gov/documents/ta...e_480472_7.pdf
Another problem [[also shared with other cities, although I can't point to any data) was that assessments [[which were also ridiculously high) were often left unchallenged. It provided a convenient political excuse [["we have a budget deficit because we can't collect our taxes"), which hid the real problem is that budgeting did not reflect the reductions in tax base that happened over time.
I call this the "Wiley Coyote" problem; he runs off the cliff, and doesn't realize it until he looked down. Detroit never wanted to look down.
I feel that both problems will likely be solved in the near future--the tax base downtown is certainly expanding.
Everyone and their mother wants to 'rightsize' the city's infrastructure. Fine idea. Not politcally possible.
The political resistance is city residents themselves, who seem to prefer complaining about underfunding and of income inequality rather than fixing the problem themselves.
Our tax-credit-welfare-program-driven out-sized government is the problem. It encourages the believe that lack of money is the problem.
Just curious ...what do you think will happen to Detroit when the next big
near-end-of-decade recession hits? Are the new businesses and home buy-
ers financially big and strong enough to weather a significant increase in
unemployment and consequently reduced purchasing power?
Recall that major recessions have occurred near the end of most decades
for the past 120 years ...
Actually, many indications suggest that the next recession [[which WILL be worse than the last) could hit as soon as this year.
All of the key economic indicators are repeating everything that took place in late 2007/early 2008 right now.
Yeah, the COD and GM/ChryslerFord may be on a somewhat more stable financial footing thanks to being relieved of their legacy debts via. bankruptcy proceedings, but let's not pretend they won't be hit hard like always have been in the past by the huge decline in demand once people start fearing for their jobs again [[as mass layoffs kick back into gear) and thus put off new car purchases again, as the state of Michigan has done very little, if anything, to diversify our economy beyond the Auto Industry.
It is the government's job to build an environment that's attractive to other industries [[and the people those industries would like to hire).
Michigan has not done this successfully, as becoming the Mississippi of the north obviously hasn't worked. It shows with our urban core in shambles, our struggle to maintain our road infrastructure, the lack of other dedicate means of transit aside from the automobile and our unfriendly social policies such as our continued fight against gay rights.
Great question. I think the answer is that we're more diverse than we used to be and less diverse than we need to be. Many, many cities are focused on one or a few industries.
Also, the answer to your question depends on whether you mean downtown Detroit, the City of Detroit proper, or the Detroit metro area. Downtown has diversified over the last five years, without a doubt.
It also depends on what causes the recession: finance? oil? something else?
Many cities are focused on a single industry for a finite amount of time. I think Detroit is unusual in that it's been singularly focused on the auto industry for a century now. I can't think of another major city in the world that is still doing the same thing today that it was 100 years ago.
The San Francisco Bay Area is probably just as invested in technology companies as Detroit is to automotive, but that is not what the San Francisco Bay Area was doing a half century ago. Likewise, New York, which today has finance as its primary industry, had textiles as the primary industry just 40 years ago. And since the financial crisis the New York economy has depended on finance less. Downtown Detroit probably depends a lot less on the auto-industry than other areas of Metro Detroit, however, I don't get the sense that Metro Detroit's economy has had any meaningful transition away from automobile manufacturing.
As a FYI, the biggest clients of the tech, law and finance firms in downtown Detroit are the Big 3 automakers.
And the health care industry of course depends heavily on the Cadillac insurance benefits [[no pun intended) the UAW and salaried Big 3 workers get...
Also, the biggest difference between the Finance industry in NYC, the tech industry in San Francisco and Detroit's auto industry is that neither NYC or San Francisco's main industries are nearly as cyclical as the auto industry.
Even in recession, people will always be spending/saving money and will always need other people to assist them with managing their money. Just as well, in the 21st century, people must have the latest and greatest technology to remain competitive in our society.
Purchasing a new or CPO Automobile, on the other hand, is something people can put off forever if they're struggling to pay for their other necessities, especially if they live in a region where there are other means for transportation besides a car.