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.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[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?

[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.

[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.

[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...

[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.