Stephen Henderson: Help Detroit break its high-tax habit.

[ndavies]

OK let's look at the millage rates for the cities you listed.
[[taken from http://www.michigan.gov/documents/ta...s_353623_7.pdf)


Ann Arbor 46 mills homestead 58 Non homestead
BLoomfield hills 34 mils homestead 45 mills homestead
Birmingham 43 homestead 52 non homestead
GP 45 homestead 59 non homestead.

And then there's Detroit 66 non homestead 84 non homestead.

So they charge at least 33% less mills in property taxes and None of those cities charge an income tax or utility tax. Do you still Believe tax rates have nothing to do with it?

You say those tony suburbs have some of the highest tax rates in the state, But none of them is even close to Detroits.

[sehender1]

Believing is for religion. How about we first get some budget analysis going and figure out how much it would actually cost to run the city, before we run with scissors toward the income tax?

What you propose is not only radical, it's downright irresponsible. You don't just start bleeding the city dry, hoping that it will survive on a wing and a prayer. You have to do your homework first. And right now, you're only presenting half the picture.

You're trying to get a 300 lb. person to lose weight on a diet intended for someone who weighs 120. First, determine if that's actually healthy or not, lest you kill the patient in the process. In other words, do your homework before you get all preachy with one side of the story. You're presenting an incomplete argument. Shame on you for your intellectual dishonesty.

Now I'm intellectually dishonest?
I've outlined, both in the column and in this thread, over and over again the kinds of opportunity for efficiencies that exist. I've been specific. I've been pointed.
Sorry, if you're not willing to acknowledge that, then we probably don't have much else to talk about.

[ghettopalmetto]

Now I'm intellectually dishonest?
I've outlined, both in the column and in this thread, over and over again the kinds of opportunity for efficiencies that exist. I've been specific. I've been pointed.
Sorry, if you're not willing to acknowledge that, then we probably don't have much else to talk about.

Until the dollar amounts of those efficiencies are summed, then you can't honestly discuss any sort of reduction [[let alone elimination) of the income tax.

That would be like agreeing to a job with a lower salary--but insisting you maintain your existing lifestyle, hoping you'll "somehow" work it out in the end. For all you know, the new lower salary might not be enough to cover the mortgage and groceries. And then what do you do?

You can't establish a realistic target for the tax rate until you first establish the actual costs of running the city. You may have pointed out an opportunity or two to cut waste, but that's far from producing a hard dollar amount that says, "We need X dollars a year for the City to function at a bare-bones minimum level."

Your other point of intellectual dishonesty, of course, is that we're in the biggest recession in 70 years, yet I see no mention of that in any of your reasons for the drop in Detroit's tax receipts.

[Detroitnerd]

So then what is your suggestion? You have 2 choices, cut taxes or improve city services. City services are not improving and don't show any signs of getting better soon.

You do realize you're giving me a false choice now, don't you? What sort of debate society is this?

There are ways to improve services that don't involve privatization and union-busting, but nobody wants to try them. And, frankly, I think a lot of people in the suburbs are perfectly happy with a corrupt government in Detroit because they can then use the corrupt and inefficient kleptocracy to keep screaming and pointing at and calling the city a failure.

My argument is there is no way you can improve city services enough to make a difference.

That's not an argument, it's a statement ... backed up by ... nothing? It's called begging the question, another poor debate tactic used by people to gavel through a bunch of nonsense by treating a question as settled.

You have to make it cheap enough that the people with money, who don't use a lot of city services to begin with, must be willing to move back. They are not going to move back for the city services. People looking for city services can get far better ones in the suburbs for a much smaller tax tab.

Who are these mythical people who are going to move into Detroit because taxes are low and services are shitty? Can you offer some examples of the kinds of people who want to move into a city with shitty services, but not shelling out a few points makes the difference for them? That's ... crazy?

[Detroitnerd]

Sigh.. Reading comprehension, folks.. Seriously...

I don't think there's any problem with my reading comprehension. I pointed it out, didn't I, with my usual sarcastic flair: "Oh, sure, not all taxes. Just income taxes. You know, the ones the city needs to levy to pay for services. This is more patently absurd free-market fundamentalism."

The income tax is just one of the many taxes levied on Detroiters. It equates to around 24 mills. The other 75 mills [[yes, we pay around 99 mills equivalent in Detroit) are sucked up in property taxes, the utility tax and other levies. So even if you're talking about the Laffer Curve, a concept with which I've strongly disagreed in the past, you're not talking about taking taxes to zero. Just ONE tax, the one that's the biggest outlier in the state.

Because Detroit is an outlier. Because Detroit isn't cul-de-sac after cul-de-sac of oversubsidized, race- and class-homogeneous people living off fat paychecks and pensions, amid infrastructure that was built within the last 50 years. Cities require investment to run properly. That is why taxes are significantly higher in cities than in suburbs. Detroit is an outlier for LOW taxes when compared with many U.S. cities.

Feel free to distance yourself from some of the more irresponsible free-market fundamentalists if you like. But what you're espousing is basically classic Chicago School economics, which is what we've been running on for thirty years now. So, you know, how's that been working out for Michigan? Good? Want more of it? Don't think it's a race to the bottom? Be my guest.

[bartock]

I don't think there's any problem with my reading comprehension. I pointed it out, didn't I, with my usual sarcastic flair: "Oh, sure, not all taxes. Just income taxes. You know, the ones the city needs to levy to pay for services. This is more patently absurd free-market fundamentalism."



Because Detroit is an outlier. Because Detroit isn't cul-de-sac after cul-de-sac of oversubsidized, race- and class-homogeneous people living off fat paychecks and pensions, amid infrastructure that was built within the last 50 years. Cities require investment to run properly. That is why taxes are significantly higher in cities than in suburbs. Detroit is an outlier for LOW taxes when compared with many U.S. cities.

Feel free to distance yourself from some of the more irresponsible free-market fundamentalists if you like. But what you're espousing is basically classic Chicago School economics, which is what we've been running on for thirty years now. So, you know, how's that been working out for Michigan? Good? Want more of it? Don't think it's a race to the bottom? Be my guest.

Change cul-de-sac to block. It isn't?

[ndavies]

There are ways to improve services that don't involve privatization and union-busting, but nobody wants to try them. And, frankly, I think a lot of people in the suburbs are perfectly happy with a corrupt government in Detroit because they can then use the corrupt and inefficient kleptocracy to keep screaming and pointing at and calling the city a failure.

I forgot I may be arguing with a city employee/administrator who is just trying to protect his piece of the Kleptocracy.

The status quo isn't working. Cost have to be reduced. Tax levels have to be reduced. Services have to be improved. Without the stick nobody's going to willing give up thier gravy train.

When property values continue to collapse and no development happens in the city without huge tax incentives , It tells you the city isn't worth moving into without a deep discount.

[Detroitnerd]

I forgot I may be arguing with a city employee/administrator who is just trying to protect his piece of the Kleptocracy.

Seriously, ndavies? This is your debate tactic? To insinuate that, in some way, I am some public employee riding a gravy train? Wow, that's pretty insulting. It's also an ad hominem attack, something that is also poor debating. Any other rules of debate you'd like to break in your angry rampage against taxes?

The status quo isn't working. Cost have to be reduced. Tax levels have to be reduced. Services have to be improved. Without the stick nobody's going to willing give up thier gravy train.

When property values continue to collapse and no development happens in the city without huge tax incentives , It tells you the city isn't worth moving into without a deep discount.

How about something even scarier, ndavies: The system IS working. This is what it is supposed to do. The city IS supposed to be a repository for the poor. The suburbs ARE supposed to cherry-pick desirable businesses and poach off the dying city. The kleptocracy in Detroit are at PEACE with suburban leaders because this is what's supposed to happen. Cutting tax rates and socking it to the city and its unions will only worsen the problem, but ... you know, after watching this for 40 years, I begin to think the system isn't broken: This is what the system is SUPPOSED to do.

[davewindsor]

Who are these mythical people who are going to move into Detroit because taxes are low and services are shitty? Can you offer some examples of the kinds of people who want to move into a city with shitty services, but not shelling out a few points makes the difference for them? That's ... crazy?

So why does the census bureau name Houston, San Antonio, Fort Worth, Austin, and Dallas [[all in Texas) as 5 of 11 of the nation's fastest growing cities if low taxes in a large city is not a big factor? http://activerain.com/blogsview/1857...rowing-cities-

In the past decade, Texas gained 4.3 million people while Michigan lost people. Austin and Dallas, I believe gained 25% in population while Detroit lost 25%. Where do these mythical people come from?

[Novine]

"You say those tony suburbs have some of the highest tax rates in the state, But none of them is even close to Detroits."

Nice job missing the point. You claimed that higher property tax rates led to lower property values. I said there's no evidence to back that up. Places like the GPs, Birmingham and Ann Arbor have property tax rates higher than almost all of the communities that surround them. But they also have property tax values as high or higher than those surrounding communities. By your logic, the opposite should be true with the higher property tax rates in those communities driving down property values.

[Novine]

"So why does the census bureau name Houston, San Antonio, Fort Worth, Austin, and Dallas [[all in Texas) as 5 of 11 of the nation's fastest growing cities if low taxes in a large city is not a big factor?"

Let's quote from the same page:

"Come on down....great weather, great food, great diversity, great housing prices, plenty of jobs, and SUPER low interest rates."

Look at that, no mention of taxes. Texas allows local governments to levy local sales taxes on top of local property taxes.

[davewindsor]

"So why does the census bureau name Houston, San Antonio, Fort Worth, Austin, and Dallas [[all in Texas) as 5 of 11 of the nation's fastest growing cities if low taxes in a large city is not a big factor?"

Let's quote from the same page:

"Come on down....great weather, great food, great diversity, great housing prices, plenty of jobs, and SUPER low interest rates."

Look at that, no mention of taxes. Texas allows local governments to levy local sales taxes on top of local property taxes.

And Detroit has even better housing prices starting at $1.

The jobs come from corporations moving to a low tax city and state, like those that are moving out of Michigan.

Hmmm. Let's see, a 2.25% city sales tax levy for 8.25% and no state income taxes vs. 2.5% city + state income incomes and a 6% sales tax rate. Which is the better deal? I didn't even check into the tax on utilities. I'm willing to bet there isn't one....

[ghettopalmetto]

So why does the census bureau name Houston, San Antonio, Fort Worth, Austin, and Dallas [[all in Texas) as 5 of 11 of the nation's fastest growing cities if low taxes in a large city is not a big factor? http://activerain.com/blogsview/1857...rowing-cities-

In the past decade, Texas gained 4.3 million people while Michigan lost people. Austin and Dallas, I believe gained 25% in population while Detroit lost 25%. Where do these mythical people come from?

And those Texas cities are all in close proximity to--wait for it--MEXICO. The Census data will show you that the bulk of the population growth in those cities is due to immigration of Hispanics, not Northern Cracker seeking a tax haven.

[davewindsor]

And those Texas cities are all in close proximity to--wait for it--MEXICO. The Census data will show you that the bulk of the population growth in those cities is due to immigration of Hispanics, not Northern Cracker seeking a tax haven.

Ya, and so what if it's next to Mexico? These immigrants go to where there's work and money. These corporations come to Texas for the low taxes and, thus provide the jobs that lead to population growth. Corporations leave Detroit to set up shop in large cities in Texas for the low taxes. People follow the jobs so they can put food on the table and lead a better life. If there were jobs in Detroit, workers would be flocking to Detroit like they were from the South during the first half of the last century.

Did you know that the state of Texas has the second highest GDP in the nation at $1.15 Trillion? That's higher than entire country of Mexico. But, of course, it has nothing do with Texas being a tax haven vs. other states. http://xfinity.comcast.net/slideshow...fastest-texas/

btw - Michigan's GDP is $372 Billion. Per capita, Texas' GDP is about $9,000 higher at $45,940.

[fryar]

The jobs come from corporations moving to a low tax city and state, like those that are moving out of Michigan.

This is about the income tax levied on individuals.
The situation involves much more than taxes.

[davewindsor]

This is about the income tax levied on individuals.
The situation involves much more than taxes.

It still plays a big role. Texas has no state or local income taxes or corporation taxes.

Do you really think that local personal income taxes for a CEO making $5m a year does not factor into the decision making process of whether to operate from Detroit or a large city in Texas? I guess Comerica Bank, that was founded and built their reputation for the past century being headquarted in Detroit, moving to Texas wasn't influenced in any way by their own CEO's pocket book.

[iheartthed]

So why does the census bureau name Houston, San Antonio, Fort Worth, Austin, and Dallas [[all in Texas) as 5 of 11 of the nation's fastest growing cities if low taxes in a large city is not a big factor? http://activerain.com/blogsview/1857...rowing-cities-

In the past decade, Texas gained 4.3 million people while Michigan lost people. Austin and Dallas, I believe gained 25% in population while Detroit lost 25%. Where do these mythical people come from?

Dallas [[the city) grew by 0.8% between 2000 and 2011 -- not exactly a stunning rate of growth. New York City, a high tax city that also levies an income tax, grew by 2.1% during that same period.

[davewindsor]

Dallas [[the city) grew by 0.8% between 2000 and 2011 -- not exactly a stunning rate of growth. New York City, a high tax city that also levies an income tax, grew by 2.1% during that same period.

I see different data. Here's one that says Austin, Texas' population grew by 40% in the last decade reaching 1.8 million people. http://www.medicalofficetoday.com/co...p?article=5256

Sounds like a stunning rate of growth to me.

[davewindsor]

Dallas [[the city) grew by 0.8% between 2000 and 2011 -- not exactly a stunning rate of growth. New York City, a high tax city that also levies an income tax, grew by 2.1% during that same period.

Here's one from the Austin's Chamber of Commerce, using US Census Bureau data. Austin's population grew by 37.3% and Metro Detroit lost 3.5% from 2000-2010. http://www.austin-chamber.org/the-ch...e/ei050311.php

[iheartthed]

I see different data. Here's one that says Austin, Texas' population grew by 40% in the last decade reaching 1.8 million people. http://www.medicalofficetoday.com/co...p?article=5256

Sounds like a stunning rate of growth to me.

That's for Austin's metropolitan area.

[davewindsor]

That's for Austin's metropolitan area.

Well, that's still a pretty stunning growth rate for Austin's metro since Metro Detroit lost 3.5% in the past decade and Detroit itself [[we know from the Free Press) lost 25% and Austin the city grew 20.4%. So were did this 25% loss from the city of Detroit go? The suburbs of Metro Detroit because of no local personal income taxes?

[Novine]

Here's the link to view the maps for the population change in Detroit city and suburbs over the past 10 years.

http://library.semcog.org/InmagicGen...2010Census.pdf

As anyone can see, it wasn't just Detroit that lost population. But not one of the suburban communities that lost population has a city income tax. There's also little correlation between property tax rates and population loss. Birmingham and Walled Lake have relatively high tax rates but gained population. Wixom has a low tax rate but was stagnant. Plymouth Township has a low tax rate and lost population. Care to explain those numbers?

[Novine]

"Do you really think that local personal income taxes for a CEO making $5m a year does not factor into the decision making process of whether to operate from Detroit or a large city in Texas?"

That CEO could have moved Comerica up Woodward to the suburbs and paid no local income tax.

[Novine]

Anyone who's familiar with local government in Texas knows that there's little comparison between cities in Texas and in Michigan. Texas has liberal annexation laws that allow cities like Austin to grow outward into unincorporated areas capturing much or all of the "suburban" growth. If Troy, Farmington Hills and Canton were all located within the boundaries of the city of Detroit, you would be able to make a more equal comparison to the growth of cities in Texas.

[fryar]

It still plays a big role. Texas has no state or local income taxes or corporation taxes.

Do you really think that local personal income taxes for a CEO making $5m a year does not factor into the decision making process of whether to operate from Detroit or a large city in Texas? I guess Comerica Bank, that was founded and built their reputation for the past century being headquarted in Detroit, moving to Texas wasn't influenced in any way by their own CEO's pocket book.

I think that the statement that the income tax is killing itself is hyperbole. You have to fix the ambulances, the police, the DFD, the schools, you can't have firestorms, etc. As far as one-shot hail mary's go, my money's on the concept behind the M-1. Not the income tax.

You do that right, people will gladly pay a premium to live between the man-made rivers that are the Lodge and I-75/I-375, because they will be able to have some vague approximation of Manhattan while staying close to home.