Allow Detroit to keep a tool to help itself

[begingri]

BY JEFF GERRITT

DETROIT FREE PRESS COLUMNIST


It’s crazy, but bills that would only allow Detroiters to continue to tax themselves at a higher rate have jacked up more Detroit bashing. One blogger — incredibly called “truthseeker”— compared the legislation to welfare and crack. Gimmeabreak. This law wouldn’t cost anyone anything, except those of us who live in Detroit. One reason it’s needed to keep Detroit solvent is the state’s broken promises. An earlier plan to phase out Detroit’s income tax was based on assurances from the state that revenue sharing would be protected. What a joke.

The state long ago reneged on its 1998 deal to freeze Detroit’s slice of revenue sharing at $333.9 million until 2007. Instead, the state cut revenue sharing, to Detroit and other Michigan cities, by more than $3 billion over the last decade. By 2007, Detroit was getting only $275 million. Since then, the amount has dwindled to $179 million. Revenue sharing is no handout. It’s money communities send to Lansing that the state promised to return.


Continued at: http://www.freep.com/article/20110512/BLOG2505/110512022/Jeff-Gerritt-Allow-Detroit-keep-tool-help-itself-?odyssey=nav|head

[Bham1982]

It's a little more complicated that this.

Much of this revenue generation is from non-Detroiters who have no say in the situation. The commuter tax is viewed by many as unfair, and is a huge revenue source for Detroit.

And the Detroit income tax isn't paid by most Detroit households, so it isn't shocking that it's popular among Detroiters. I would guess most Detroit households pay close to nothing in federal-state-city income taxes, and many receive a sizable net refund.

[mwilbert]

And the Detroit income tax isn't paid by most Detroit households, so it isn't shocking that it's popular among Detroiters. I would guess most Detroit households pay close to nothing in federal-state-city income taxes, and many receive a sizable net refund.

Are you sure about that? Detroit income tax has no standard deduction and an exemption of $600/person. It is pretty hard not to owe tax unless you don't have any income. Do most Detroit households really have no earned income?

[Bham1982]

I didn't know it was a $600 exemption; I thought it was higher.

But I still think most city households aren't paying income tax, given that public assistance, pensions and unemployment aren't taxed, and that Detroit household sizes are unusually large and household incomes are unusually low.

And Detroit has extremely low workforce participation rates.

[ghettopalmetto]

I didn't know it was a $600 exemption; I thought it was higher.

But I still think most city households aren't paying income tax, given that public assistance, pensions and unemployment aren't taxed, and that Detroit household sizes are unusually large and household incomes are unusually low.

And Detroit has extremely low workforce participation rates.

Here you go again, with more of your ongoing "Detroiters just sit around on their asses and the city wouldn't even exist but for the good graces of altruistic suburbanites" diatribe.

You seriously aren't claiming that the vast majority of Detroiters don't have jobs and incomes and tax bills, are you??? Statistics, please. Otherwise, one might think you're just making shit up.

[bartock]

Here you go again, with more of your ongoing "Detroiters just sit around on their asses and the city wouldn't even exist but for the good graces of altruistic suburbanites" diatribe.

You seriously aren't claiming that the vast majority of Detroiters don't have jobs and incomes and tax bills, are you??? Statistics, please. Otherwise, one might think you're just making shit up.

What he said was true. I disagree with your conclusions as to the motive. And, the "vast majority" of Detroiters statement doesn't make sense, either. Last year, the unemployment rate in the City of Detroit was 50%. Not everybody on public assistance, to be sure, but there are those on public assistance who work as well. Google either one, and you'll have your proof.

People who do not pay taxes tend to vote for tax increases more than people who do...there are a large number of folks in the City of Detroit who are on public assistance and vote. It isn't a revolutionary statement. If that makes someone anti-city and pro-suburban, let me suggest that you find some common fucking sense.

[gazhekwe]

When income goes down, revenue goes down. To maintain the same level of services, something's gotta give. Tax hikes are the most obvious answer. We all got sold a bill of goods by good old Ronald Reagan, that we could have it all and never have to pay for it. Wake up, folks, the piper must be paid. If the service levels can be made more efficient and less costly, that is one place to look, but ultimately, there will still have to be some level of revenue to pay for what is basic.

[drjeff]

As someone who works in Detroit but lives elsewhere for family reasons, I have no problem with paying tax for city services. And anyone who does have a problem with it should quit his/her damn job in the city and find one someplace else.

People who bitch about taxes have no idea how historically low taxes actually are these days.

[ndavies]

The high cost of this "tool" is one more reason people are fleeing to the suburbs and out of state. The high tax rates continue to be another reason businesses and people won't move into the city. The state lagislature ought to do Detroit a favor and force it to lower it's tax rates.

Why do you think the city has to dish out brownfeild, historic, NEZ and OPRA tax breaks to help[ get people to move into the city? If the tax rates made sense none of this would be needed.

[ghettopalmetto]

The high cost of this "tool" is one more reason people are fleeing to the suburbs and out of state. The high taxes rates continue to be another reason businesses and people not moving into the city. The state lagislature ought to do Detroit a favor and force it to lower it's tax rates.

Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

And when you lump that 2.5% on top of the 4.35% state income tax, well that's a sky-high 6.85%. That's lower than the top marginal income tax rate in "overtaxed" states such as Arkansas [[7.0%), Delaware [[6.95%), Idaho [[7.8%), Iowa [[8.98%), Maine [[8.5%), Minnesota [[7.85%), Montana [[6.9%), North Carolina [[7.75%), South Carolina [[7.0%), Vermont [[8.95%) and Wisconsin [[7.75%).

So what was that about high taxes discouraging growth?

[bailey]

Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

[ghettopalmetto]

how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

How about when suburbanites seek geographic solutions to societal problems, they forfeit the right to pass judgment?

[bailey]

How about when suburbanites seek geographic solutions to societal problems, they forfeit the right to pass judgment?

When the solution is something other than "send us your money, but don't dare ask to have much of a say in how it's spent" I'll get right on that regional plan.

Why make it a precondition when it's a likely result? When you have a city that abounds with poor, poorly educated, civically unengaged people, of course you're going to have the scum rise to the top. If we could expand taxation AND representation into a metropolitan government, it would help clean up Detroit's entrenched kleptocracy, yes?

That would presuppose a drawing of the district lines so that the poor, poorly educated, and civically disengaged don't continue to make up the majority of the pool. There are far too many invested in keeping that population in the majority for it ever to happen.

[Detroitnerd]

how about before we go pillaging the neighbors, perhaps deal with the incompetents and thieves that run the city? Start with Anthony Adams... and continue through the alphabet of buffoons that pop up time and time again when multiple millions disappear down a rabbit hole.

Why make it a precondition when it's a likely result? When you have a city that abounds with poor, poorly educated, civically unengaged people, of course you're going to have the scum rise to the top. If we could expand taxation AND representation into a metropolitan government, it would help clean up Detroit's entrenched kleptocracy, yes?

[ndavies]

Yeah, that whole 1% [[for corporations) and 2.5% [[for resident individuals)...what a bitch.

You want to lower tax rates in the City of Detroit? Adopt a metropolitan government to spread the cost of social services, re-establish Detroit's share of state revenue sharing, or some combination of the above.

And when you lump that 2.5% on top of the 4.35% state income tax, well that's a sky-high 6.85%. That's lower than the top marginal income tax rate in "overtaxed" states such as Arkansas [[7.0%), Delaware [[6.95%), Idaho [[7.8%), Iowa [[8.98%), Maine [[8.5%), Minnesota [[7.85%), Montana [[6.9%), North Carolina [[7.75%), South Carolina [[7.0%), Vermont [[8.95%) and Wisconsin [[7.75%).

So what was that about high taxes discouraging growth?

You're forgettring the utility tax which no other city in the state can charge and the 73 mills for non homestead property tax. Ithe next nearest cities non homestead millage rate is 55 mills. So I pay far more than I would anywhere else in the state, and I get no police protection and a school system in complete meltdown.

If you want to know why every new development require huge incentives, you can look directly at the absurd tax rates.

[mwilbert]

Detroit's massive structural issues are not the result of being the regions magnet for the poor/indigent/disabled. Detroit has a 3 billion dollar a year budget it can't figure out how to balance. The presence of some homelessness is not causing 300 million dollar deficits every year.

I don't think this is logical. First, the person you were replying to didn't specify homelessness, but rather the " poor, indigent, and disabled". The costs of hosting those folks isn't just whatever is paid to do it, less whatever limited taxes they could pay, but the fact that many people who are better-off don't want to live near them, so those resources are denied the city as well.

In fact, I think I can state quite confidently that if there were some way to remove all the poor people from Detroit next week, the city would be visibly improving within a year, and vastly improved within five years. So I would say there is a considerable cost to Detroit in being the home to that group.

[fryar]

There are numerous other helpful suggestions that have been made on this board and elsewhere over time. I can accept an EFM if he or she can root out corruption and eliminate some waste, for example. But that is a different conversation.

[fryar]

And finally: This endless refrain about how grating Detroit taxes are is hyperbole. It's like that old line about how if you're not mad, you're not paying attention. If taxes are what you're mad about, your head is up your butt. The commuter tax is marginal at best. The Crown Vic ambulance, now that is something worth bringing up. If you make $70k, your commuter tax is less than $1,000 [[right? 1.25%?) What are you paying for parking that this is a headline concern for you? For gas? How long is your commute? The commuter tax is there, sure, but it's total background noise. A minor consideration.