Reducing or eliminating Detroit's city income tax

[Mind field]

One of the most common arguments against locating a business in the city of Detroit is paying city income taxes. This is a huge disincentive to locating anywhere in the city. I'm wondering how feasible it would be to reduce the tax rate, making it equal to Michigan's second city, Grand Rapids, which currently taxes residents at 1.5% for residents and 0.75% for nonresidents.

Detroit needs every competitive advantage that it can get to attract new residents, new businesses, and more investment. I have no idea what the lost income would be replaced by.

[thoro]

That would be a start. Bad enough we have sky high insurance rates, crime, blight and a host of other problems. Eliminating the income tax would be a slight enhancement to offer people thinking of relocating.
Another thing, until that cesspool we call DPS is cleaned up, what responsible parent would even think of moving here? I see "reverend" murray got re-elected......we can forget about anything positive happening on that front.

[davewindsor]

One of the most common arguments against locating a business in the city of Detroit is paying city income taxes. This is a huge disincentive to locating anywhere in the city. I'm wondering how feasible it would be to reduce the tax rate, making it equal to Michigan's second city, Grand Rapids, which currently taxes residents at 1.5% for residents and 0.75% for nonresidents.

Detroit needs every competitive advantage that it can get to attract new residents, new businesses, and more investment. I have no idea what the lost income would be replaced by.

Regional amalgamation of metro into a supercity like Los Angeles [[469 sq. miles) would bring economies of scale that would eliminate the need for city income taxes. But, with all the internal squabbling it's probably as likely to happen as Detroit remaining as a city in its current size and eliminating it's income taxes. Next to nil...

[313WX]

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

New York City has an income tax, and yet it remains the [[by far) largest and wealthiest major city in the country.

If Detroit can reduce its petty crime problem [[such as break-ins, robberies, etc.) by restoring city services to the point where the police/fire/ambulance crews can respond to an emergency in a reasonable time [[talking 5-10 minutes, not 30-60 minutes) and subsequently reduce the insurance rates so that they're competitive with neighboring suburbs, the income tax rate would be a non-problem as the benefits of doing business in Detroit would outweigh that otherwise minor expense.

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...

[Honky Tonk]

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

New York City has an income tax, and yet it remains the [[by far) largest and wealthiest major city in the country.

If Detroit can reduce its petty crime problem [[such as break-ins, robberies, etc.) by restoring city services to the point where the police/fire/ambulance crews can respond to an emergency in a reasonable time [[talking 5-10 minutes, not 30-60 minutes) and subsequently reduce the insurance rates so that they're competitive with neighboring suburbs, the income tax rate would be a non-problem as the benefits of doing business in Detroit would outweigh that otherwise minor expense.

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...

@ least you're honest about what you're doing, for whatever reasons. I admire that. You're not hiding behind a "Do it in duh D" t-shirt. You're also right on a number of points. The City has some real issues that everyone side steps and sugar coats. They are preventing real growth.

[Vic01]

...I have no idea what the lost income would be replaced by.

You might want to gather some ideas before even suggesting reducing taxes. Then again 313 made some good points...

[Hamtragedy]

I just want to be able to get thru to any city department without waiting on hold for an hour or worse, getting straight thru to a voicemail without the "sorry, messages cannot be accepted at this time because the voicemail you are trying to reach is full." If getting rid of city income taxes can get me any of these, in addition to the above mentioned posts, I'm all for it.

[maverick1]

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

New York City has an income tax, and yet it remains the [[by far) largest and wealthiest major city in the country.

If Detroit can reduce its petty crime problem [[such as break-ins, robberies, etc.) by restoring city services to the point where the police/fire/ambulance crews can respond to an emergency in a reasonable time [[talking 5-10 minutes, not 30-60 minutes) and subsequently reduce the insurance rates so that they're competitive with neighboring suburbs, the income tax rate would be a non-problem as the benefits of doing business in Detroit would outweigh that otherwise minor expense.

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...

This is such a minor yet HUGE problem in Detroit. The average person with a decent job gets tired of the nickle and dime crimes. The robberies, B&E's, car thefts, belongings stolen from cars, etc. gets old. Detroit has shown it's incapable of stopping this kind of crime.

[Wesley Mouch]

That would be a start. Bad enough we have sky high insurance rates, crime, blight and a host of other problems. Eliminating the income tax would be a slight enhancement to offer people thinking of relocating.
Another thing, until that cesspool we call DPS is cleaned up, what responsible parent would even think of moving here? I see "reverend" murray got re-elected......we can forget about anything positive happening on that front.

Makes me curious. What did the bankruptcy process determine? How is Detroit's financial future being created out of our messy past? Did the overlords decide that residents must be saddled with income tax forever -- or is there a long-term plan to phase it out?

As to R. Murray --- just be glad that our State dictator encourages Charter Schools. Monopolies are always bad.

[Hypestyles]

... are we back to Newt's "tax-free-zone" fantasy again? geez...

[mwilbert]

Makes me curious. What did the bankruptcy process determine? How is Detroit's financial future being created out of our messy past? Did the overlords decide that residents must be saddled with income tax forever -- or is there a long-term plan to phase it out?

Nothing in the plan about phasing it out. There is language about the desirability of reducing both the income and property tax rates, in conjunction with improved collection. But while there is some specific discussion of the amount of property tax reduction, there is no similar discussion of income tax rates.

[Chicago48]

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

New York City has an income tax, and yet it remains the [[by far) largest and wealthiest major city in the country.

If Detroit can reduce its petty crime problem [[such as break-ins, robberies, etc.) by restoring city services to the point where the police/fire/ambulance crews can respond to an emergency in a reasonable time [[talking 5-10 minutes, not 30-60 minutes) and subsequently reduce the insurance rates so that they're competitive with neighboring suburbs, the income tax rate would be a non-problem as the benefits of doing business in Detroit would outweigh that otherwise minor expense.

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...

I migrated to Chicago in 1989 and one of the reasons was two break-ins and one assault. It was time to go. But I also learned -- never live on the first/ground floor of a complex!
Chicago is considering a surcharge or tax against suburban workers who makeup 75% of our work force. YES! 75% of the downtown work force comes from the suburbs. The mayor is resisting, but it will come up again and against for the City Council. And it should be. for 8 hours a day suburban workers use our infrastructure and they should have some type of surcharge/tax taken.

Your last paragraph is so laughingly true!

[davewindsor]

...
Chicago is considering a surcharge or tax against suburban workers who makeup 75% of our work force. YES! 75% of the downtown work force comes from the suburbs. The mayor is resisting, but it will come up again and against for the City Council. And it should be. for 8 hours a day suburban workers use our infrastructure and they should have some type of surcharge/tax taken....

Americans living in Windsor pay close to 5 bucks in toll booth tax every time they cross the tunnel or bridge. Why not put toll booths on every entrance to the city of Detroit for suburbanites? Maybe even have the toll booth guy come out and do random car searches. Hahaha. Oh the horror...

[Gpwrangler]

Americans living in Windsor pay close to 5 bucks in toll booth tax every time they cross the tunnel or bridge. Why not put toll booths on every entrance to the city of Detroit for suburbanites? Maybe even have the toll booth guy come out and do random car searches. Hahaha. Oh the horror...

Especially if we charged in both directions...

[davewindsor]

Especially if we charged in both directions...

Hey, they can even take it a step further. Since in the previous thread someone said that DPD officers make $12/hr, put them in the booth with a dog sniffer. Dog smells drugs, car confiscated and goes to the city's treasury. Pickup truck with scrap metal and copper pipes that doesn't have paperwork over where it came from also gets confiscated and goes to city's treasury. Stolen cars don't leave the city. Tolls pay for police budget. Budget crisis solved. Drug and scrapping crime rate down.

[Honky Tonk]

Americans living in Windsor pay close to 5 bucks in toll booth tax every time they cross the tunnel or bridge. Why not put toll booths on every entrance to the city of Detroit for suburbanites? Maybe even have the toll booth guy come out and do random car searches. Hahaha. Oh the horror...

I think you're on to something here, Dave.

[thoro]

[QUOTE=Wesley Mouch;458163]Makes me curious. What did the bankruptcy process determine? How is Detroit's financial future being created out of our messy past? Did the overlords decide that residents must be saddled with income tax forever -- or is there a long-term plan to phase it out.

A few of "the chosen" made a lot of money....other than that, I would be hard pressed to see anything else.

[GPCharles]

At least the income tax is based on something real - your reported income.

The property tax is based on valuations [[assessments) that bear little relationship to reality.

[Hamtragedy]

Makes me curious. What did the bankruptcy process determine? How is Detroit's financial future being created out of our messy past? Did the overlords decide that residents must be saddled with income tax forever -- or is there a long-term plan to phase it out?

Whatever it accomplished, they're digging up Livernois yet again. Apparently it's business as usual.

[rjlj]

For 2013 the following Michigan cities levy an income tax of 1% on residents and 0.5% on nonresidents. Albion, Battle Creek, Big Rapids, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield and Walker.
The exceptions to the above rates are as follows:

Residents	Nonresidents
Detroit	2.4%	1.4%
Grand Rapids	1.5%	0.75%
Highland Park	2%	1%
Saginaw	1.5%	0.75%

[Wesley Mouch]

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

New York City has an income tax, and yet it remains the [[by far) largest and wealthiest major city in the country.

....

No it is not. 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.

As to the NYC comparison -- poppycock. NYC is never a comparison to anything. Neither is SF. By your logic we might also do well to raise rents to $2,700 for a 1-bedroom apartment to achieve success.

NYC is the finance, entertainment, and corporate capital of America. It is the ultimate non-example of anything. Maybe we'd be better tripling or quadrupling our tax then so we can be more like they are -- and maybe get the State to increase their tax rate too. The tax burden in NY is obscene -- and they know it but can't stop.

[noggin]

For 2013 the following Michigan cities levy an income tax of 1% on residents and 0.5% on nonresidents. Albion, Battle Creek, Big Rapids, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield and Walker.
The exceptions to the above rates are as follows:

Residents	Nonresidents
Detroit	2.4%	1.4%
Grand Rapids	1.5%	0.75%
Highland Park	2%	1%
Saginaw	1.5%	0.75%

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.

[Gpwrangler]

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 taxes weren't a deciding factor for me. The lack of response to property crimes and uselesness of an alarm system clinched it.

[Spartan]

As long as companies pay 2-3% higher in the city, I see no problem with the income tax. I don't know if that's happening, but it is something that should be the responsibility of employer to mitigate. If there's one thing Detroit doesn't need, it's less tax revenue.

[Detroitnerd]

The big problem with municipal income taxes is they chase away prosperous citizens, leaving mostly low income and government supported ones.

Only when your regional policy is to abandon the central city.

Oh, wait, that's right. New York City is all abandoned, and just full of poor folks.