A tax free Detroit

**Danny** · October-09-10, 01:16 PM

What certian areas in Detroit become tax free? Will it welcome people back to setting up shop and become permanent residents or will it damage city services? Any Thoughts.

**mam2009** · October-09-10, 04:11 PM

In my fantasy, Detroit would be federal income tax free for five to seven years. Or maybe federal student loan debt would be forgiven for any college graduate that has already lived here for more than five years or who moves here for a minimum of five years. That certainly might dramatically change the demographic of the City for the better. And hopefully, housing, businesses and jobs would follow.

Paddington · October-10-10, 09:09 AM

Federal income tax free? Ridiculous. Perhaps you haven't read the parts about "equal protection under the law". What business is it of Washington to prop up Detroit? There will be no free lunch. So you can keep dreaming.

If Detroit does care about making taxes better, why not focus on something it has control over? Detroit should eliminate its city income tax. I pay well over $500 in city income tax. That's a significant chunk of money. I would not be paying that tax if my employer's building was situated in most of the other municipalities in this region.

Hell, GM almost moved from Detroit to Warren because of the income tax argument. It was Obama's administration itself that put a stop to that plan as a favor to David Bing.

**Hermod** · October-10-10, 09:56 AM

Originally Posted by Paddington

Federal income tax free? Ridiculous. Perhaps you haven't read the parts about "equal protection under the law". What business is it of Washington to prop up Detroit?

Interesting point, Paddington.

"Income tax free" would probably not pass constitutional muster.

An "income tax credit" or "income tax deduction" might pass if properly worded.

A "deduction" might be the best course of action because it has more value to the high income earners and less to the low income earners [[I assume you are trying to attract high income folks).

Maybe provide a "triple city income tax deduction" for the first five years for taxpayers who move into and purchase a sole residence in "economically impacted cities". That way the rich guy can deduct triple the income taxes he pays to the city from his federal income tax.

**English** · October-10-10, 10:16 AM

Originally Posted by Paddington

There will be no free lunch. So you can keep dreaming.

This is hilarious. American history is actually peppered with free lunches:

http://en.wikipedia.org/wiki/Homestead_Act
http://en.wikipedia.org/wiki/Nationa...ng_Act_of_1934
http://en.wikipedia.org/wiki/African..._the_G.I._Bill

And this is just off the top of my head, quickly on a leisurely Sunday morning. It's funny that the first 200 years of the history of the United States was all about giveaways for what I suppose were the "right kind of people," but then when a nation in decline finally tried to make up for some of this earlier nonsense [[which can never be made up for -- it's like giving the folks at the back of the line roller skates when the folks at the front are miles ahead), suddenly, it's not okay.

This is one of my pet peeves, along with "there are no people in Detroit" and "my ancestors worked hard for everything they had." As if the hundreds of thousands of people in what is still the largest city in Michigan are not people, and everyone's ancestors didn't work hard.

**canuck** · October-10-10, 11:11 AM

Originally Posted by English

This is hilarious. American history is actually peppered with free lunches:

http://en.wikipedia.org/wiki/Homestead_Act
http://en.wikipedia.org/wiki/Nationa...ng_Act_of_1934
http://en.wikipedia.org/wiki/African..._the_G.I._Bill

And this is just off the top of my head, quickly on a leisurely Sunday morning. It's funny that the first 200 years of the history of the United States was all about giveaways for what I suppose were the "right kind of people," but then when a nation in decline finally tried to make up for some of this earlier nonsense [[which can never be made up for -- it's like giving the folks at the back of the line roller skates when the folks at the front are miles ahead), suddenly, it's not okay.

This is one of my pet peeves, along with "there are no people in Detroit" and "my ancestors worked hard for everything they had." As if the hundreds of thousands of people in what is still the largest city in Michigan are not people, and everyone's ancestors didn't work hard.

Again, on the spot. Not to the right, not to the left; just dead on, English. Those who oppose this supposed free lunch at a time of great need do it because they think it will save their asses from too much proximity.

They will oppose good transit and lifting central Detroit because in doing so,
this would entitle the non-people to be on a level playing field. If Detroit and its black majority and administration were to succeed, this would mean the end of a convenient cliché. As I mentioned earlier in another post, just look at Haiti's history in Wikipedia to discover how that country was kept in poverty and slavery so that the example of a freed black ex-colony overcoming its dependance on the mother country would never be met.

The operative word here is dependance

Paddington · October-10-10, 11:47 AM

Jesus H. Christ, 5 posts in and someone has already pulled out the fucking race card. No wonder Michigan is such a global laughingstock.

Take advice that's actually feasible and leave the bat shit crazy notions at home, that even with Obama in the White House have zero chance of ever passing.

Chances that the federal gov't will grant Detroit an income tax break: Zero, zip, zilch.

OTOH, focus on things that you can control. Maybe Detroit should look into eliminating its 2%/1% city income tax, which it has direct control over. Which does drive businesses out to the suburbs. If the other 90% of municipalities in Michigan can get by without one, and deliver better schools, EMS, police, roads, etc. and other services to its citizens then Detroit is doing something wrong.

Bearinabox · October-10-10, 12:15 PM

Originally Posted by Paddington

If the other 90% of municipalities in Michigan can get by without one, and deliver better schools, EMS, police, roads, etc. and other services to its citizens then Detroit is doing something wrong.

What those municipalities did "right" was to not be mature, built-out industrial cities at the end of World War II. I don't deny that Detroit city government has done a lot of things wrong, but that's not why we have the income tax.

**canuck** · October-10-10, 08:09 PM

Originally Posted by Paddington

Jesus H. Christ, 5 posts in and someone has already pulled out the fucking race card. No wonder Michigan is such a global laughingstock.

Take advice that's actually feasible and leave the bat shit crazy notions at home, that even with Obama in the White House have zero chance of ever passing.

Chances that the federal gov't will grant Detroit an income tax break: Zero, zip, zilch.

OTOH, focus on things that you can control. Maybe Detroit should look into eliminating its 2%/1% city income tax, which it has direct control over. Which does drive businesses out to the suburbs. If the other 90% of municipalities in Michigan can get by without one, and deliver better schools, EMS, police, roads, etc. and other services to its citizens then Detroit is doing something wrong.

Maybe you are right about the businesses being driven out to the suburbs like GM moving their staff from the Ren Cen HQ to Warren. That would have been a great gift to Mayor Bing [[then newly elected) and his impotent administration. That income tax levy was too much for GM to bear but again Obama [[newly elected) helped them out. The 6 million in municipal tax GM was paying the city wouldnt even cover a fraction of the top pay and options of one GM vice-president.

**mam2009** · October-10-10, 09:01 PM

The inflated income tax for residents and the income tax on the non-resident employees came about due to the massive loss in property tax revenue from those who "flew" out of the City. The City needs revenue to survive just like our households need salaries to survive. Perhaps our federal government could've saved a little money by not making it so easy for people to "fly" to the suburbs by subsidizing road and infastructure to support the massive suburban flight. And perhaps our state government could've avoided putting the final nail in Detroit's coffin by removing the residency requirment. This City keeps getting poorer and poorer as its middle class and educated citizens move out [[or can't find a job) yet folks believe that it can miraculously get better and better. The chasm between the rich and the poor in this country continues to get wider and wider. Why, oh why would anyone think that Detroit will ever be able to do more with less?!

**EastsideAl** · October-10-10, 09:47 PM

Originally Posted by Paddington

Jesus H. Christ, 5 posts in and someone has already pulled out the fucking race card.

I must say that this phrase is a particular historical pet peeve of mine. The "race card" has been played throughout American [[indeed, world) history. It was played when humans of a different race were bought and sold, it was played when racial discrimination in nearly all aspects of life was encoded in law and social practice, and it was played when many Americans of the dominant race fought tooth, nail, and blood to preserve their dominance [[and moved away when they couldn't). But let someone of another race mention the subject of race and suddenly - horrors - out of nowhere the dreaded "race card" has been played. How dare they!

**MCP-001** · October-11-10, 08:24 AM

Getting back on track here...

A tax-free Detroit would be an great incentive towards getting businesses and people to move back into the city.

The income tax code is chock full of exemptions, so I don't see this as impossible.

But this was floated before about 10-15 years ago and was shot to pieces in no time flat.

Have times changed enough for it to be reconsidered???

**fryar** · October-11-10, 01:37 PM

The elimination of the income tax in Detroit is certainly far more easily accomplished, but it only serves to further wreck the city's budget, and it's pretty much meaningless as an incentive. You don't choose not to live in the city because of the income tax.

I can't speak to what the tax burden on businesses is, but the individual income tax is more of a minor nuisance than a factor really holding anything back, IMO.

The income tax advantages would have to be on the federal level for this to really do much.

**n7hn** · October-11-10, 04:07 PM

oops, I mis read, nevermind

**canuck** · October-11-10, 05:52 PM

Originally Posted by mam2009

The inflated income tax for residents and the income tax on the non-resident employees came about due to the massive loss in property tax revenue from those who "flew" out of the City. The City needs revenue to survive just like our households need salaries to survive. Perhaps our federal government could've saved a little money by not making it so easy for people to "fly" to the suburbs by subsidizing road and infastructure to support the massive suburban flight. And perhaps our state government could've avoided putting the final nail in Detroit's coffin by removing the residency requirment. This City keeps getting poorer and poorer as its middle class and educated citizens move out [[or can't find a job) yet folks believe that it can miraculously get better and better. The chasm between the rich and the poor in this country continues to get wider and wider. Why, oh why would anyone think that Detroit will ever be able to do more with less?!

Yes, there is a large state and maybe federal responsibility in protecting the integrity of the regional core that is Detroit city. Alarm bells didnt go off soon enough, but why? Surely the Jesus H. Christ race card had a dominant role in the belated attempts at staving off Detroit' decline. Of course there are a lot of fires that need to be put out in the US at any given time, natural disasters etc... If the income tax were taken on a regional basis, it would mean a general responsibility toward Detroit's problems. A smaller percent might indeed be enough to make a difference pending a regional Metro government. This could in fact lead to an enhanced need for cooperation between counties in the region. The state would [[I'm only guessing) have to impose an income tax via a special law to support the core city in a yet to be defined metro region. The alleviated burden on Detroit might make planning and financing transit easier in the short run. The surrounding cities would obviously benefit from a better line of credit also.

**mwilbert** · October-11-10, 06:05 PM

I really don't understand why people keep bringing this up. It isn't going to happen, not because it couldn't be done legally [[City of Detroit residency tax credit, anyone) but because there is no constituency for it outside the immediate area, and if I were the mayor of Southfield or Warren, I'd lobby against it along with the rest of the world. Why anyone thinks the rest of the US would favor a special tax status for Detroit is hard for me to grasp.

I'd certainly be happy if the city cut the city income tax, except for the fact that the city doesn't exactly have any slack in its budget to offset that. If I were in charge of cutting city taxes and I had some money to play with, I think I'd work on lowering the property taxes first, because they are both more unpredictable and further out of line with what people expect property tax rates to be. What I would really like is to have separate tax rates for land and improvements, then raise the taxes on land and lower the taxes on improvements.

**fryar** · October-11-10, 06:19 PM

Originally Posted by mwilbert

Why anyone thinks the rest of the US would favor a special tax status for Detroit is hard for me to grasp.

Totally valid. The only reason I bothered to comment on this idea initially is that it was put forward by Newt Gingrich at the annual Mackinac Conference, or whatever that forum is called.

No, I'm not counting on it, either. But you could argue for domestic aid, and that this is a way that encourages private enterprise and so on while circumventing graft.

Paddington · October-12-10, 06:28 AM

Try to grow a brain and use it.

You think the whole world revolves around Detroit, and everyone wakes up everyday thinking about Detroit. People think about their cities. And not every place other than Detroit is Bloomfield Hills. Most are in between. And most don't see themselves as doing that well right now.

Detroit wants an income tax break. Then so will Toledo, Cleveland, Rochester, Buffalo, Pittsburgh... Then it turns into a regional thing. Then LA will want one, so will Phoenix and Atlanta.

Meanwhile back home, lots of Detroit's neighbors aren't exactly all that prosperous themselves. Dearborn will want one, Warren will want one. Hell, every mayor will rightfully lobby for their own tax break.

Then the gov't starts losing out on some pretty significant income so they can't allow it.

**Kevgoblue** · October-12-10, 08:55 AM

Isn't this the system that is currently in place? The only differnce is the recipients of the tax breaks are businesses and not individuals. I haven't quite figured out why this is acceptable for one group and not another.

**renf** · October-12-10, 11:33 AM

There are many areas within Detroit where businesses or residents pay reduced
taxes. These include the large federal empowerment zone, the enterprise zones focused on residential development and the enterprise zones focused upon business development. And then there are the middle and upper economic status neighborhoods where most residents can obtain a 35% reduction in property taxes. There are many opportunities in Detroit to lower your tax obligations.

**English** · October-12-10, 09:30 PM

For the record, I didn't pull the race card. I pulled the race, gender, class, religion, AND sexuality cards. It's not just about black vs. white -- poor people, women, non-WASPs, and non-straights had little to NO access to most entitlements throughout American history. Right now, I'd argue that anti-gay and anti-Muslim prejudice are, on a daily basis, the most significant civil rights issues.

Yes, I was raised in this hyper-racialized, crazy region like most people here. Yes, I have my own stuff I have to work through -- I own that. But geez, how on earth is trying to give Detroit a fair shake any kind of "free lunch" when for the past 40 years, Detroit has contained most of the social challenges so that the O.C. could become what it is today? Oakland County wouldn't even be possible without what is, in effect, a tax break -- fewer people needing social services, and more taxpayers. This means that services go further than they might have if those who are neediest had been equally distributed across the region.

**Hypestyles** · October-13-10, 02:01 PM

realistically, how would this be applied? would it be as simple as a mayoral declaration-- would it have to pass city council? Would the governor's office have to sign off on it? would it have to pass the state legislature? what would be the time frame from the green-light to the implementation?

**Novine** · October-14-10, 11:58 AM

It's not going to happen. But to answer your question, what are you asking about? Getting rid of Detroit's income tax? Federal income tax? Free ponies?