  Rhymeswithrawk Member Username: Rhymeswithrawk Post Number: 211 Registered: 11-2005 |
It seems to me that if the city wants to get more people moving back to the city, it seems ridiculous that those of us who work AND live within its limits get double-dinged on taxes. Granted, taxing those who work in the city doesn't do much to inspire businesses to relocate either, but if there are more people living here, the city gets more in property taxes (if people pay, of course). I'm going to plead some ignorance on the subject. I don't pretend to be an expert on taxes. Still, the NEZ tax breaks seem like only a starting point. As someone looking to go from renting in Detroit to buying, a lot of the homes here need a lot of work, so the NEZ is more of a necessity for me than an incentive. Obviously those who work in the city and live in the suburbs don't want to pay a tax, but what do you think about this issue? | ||
Detroitplanner Member Username: Detroitplanner Post Number: 837 Registered: 04-2006 |
One of the biggest hurdles for the City is to see the impact of this income tax. As part of the casino deal, Engler/Archer devised a plan to offset the revenues from the casinos by dropping the income tax by 33 percent (from 3 percent to 2 percent for residents). It had only dropped about 15 percent by the time Kilpatrick froze the deal. I see this as a tax that Detroit pays that most of its competition in the suburbs do not. I would consider this tax the first one to go in order to help improve the economic climate within the city boundaries. The amount of write-off you get from your city taxes on your state taxes is not much. Property taxes, while high in Detroit, also have a great benefit to the payer in terms of being able to lower your taxes to the point of being in a lower tax bracket. | ||
Mikeg Member Username: Mikeg Post Number: 483 Registered: 12-2005 |
quote: Au Contraire! High property tax rates, as measured by the non-homestead rates, serve to depress the value of all homes in that tax district. | ||
321brian Member Username: 321brian Post Number: 287 Registered: 02-2006 |
Nothing about property taxes in Detroit is of benefit to the homeowner. Bad city services, high crime, bad schools.....all the usual. I have had the idea for a long time to just lower the homestead rate to about 40 mils and leave the non-homestead rate at its current level. I think this would encourage people to buy in the city and stay in the city. Not much of Detroits income comes from property taxes anyway. I think the benefit would be in the increase in population. It might take awhile but I think it would work. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 840 Registered: 04-2006 |
Sorry Mike, tell me how someone-elses non-homestead tax burden does not allow me to itemize my deductions? Non-homestead properties certainly do not hurt places like Torch Lake or Traverse City. I think you need to use the word slumlord. That is an interesting concept Brian, but I don't think it would hold up in court. Unfortunately, slumlords have deep pockets and short arms. (Message edited by Detroitplanner on January 23, 2007) | ||
Track75 Member Username: Track75 Post Number: 2480 Registered: 10-2003 |
quote:While property taxes certainly are deductible, you're still paying 75% of the cost out-of-pocket if you're in the 25% bracket. A really "great benefit" would be to lower the taxes and save 100%, not just 25%. BTW, Mike wasn't referring to your ability to itemize. Rather, he's making the point that increases in property taxes decrease property values. If the cost of carrying a property goes up by say, $100 per month, the value of that property goes down by that amount, capitalized. At current interest rates it would lower the property's value by about $15,000 - $20,000 depending on tax rates. That's the cost of paying an extra $100/month in perpetuity. Even if the tax increase only affects rental properties, there are enough single-family home rentals in the city that the lower value of those houses will impact owner-occupied homes as well in most neighborhoods where there is a mix of rentals and non-rentals. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 841 Registered: 04-2006 |
Thanks Track, you framed it well. Another interesting proposal would be to keep property taxes at the same amount, but to allow for the itemizing of home improvements (supported by reciepts of course). Something like that would really help keep the housing stork of places like Detroit in better shape by incentivizing slumlord and low income ownership investment in maintaining the property. I could however see this frought with problems in higher income communities where it would be used to write-off the cost of fancy decks, pools, or monster garages so the code would need to be very specific, and with specificty comes regulation... ughh. | ||
Mikeg Member Username: Mikeg Post Number: 484 Registered: 12-2005 |
Detroitplanner, My "au contraire" was with respect to the portion of your statement that claimed that high property taxes "have a great benefit to the payer", not to their itemization/deductibility. Track75 explained my point much better than I did. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 844 Registered: 04-2006 |
my whole point was if I have to pay a tax, I'd rather pay one that is deductible like on property than one that is based on income or sales tax. I guess my choice of words using great benefit was poor, I should have stated it plainer. At that hour of the night I am ready for bed on the weekdays and I should not be typing! | ||
Ndavies Member Username: Ndavies Post Number: 2407 Registered: 10-2003 |
State and city income taxes are deductible if you itemize. Sales taxes are if you live somewhere that doesn't have state income taxes. | ||
Mjb3 Member Username: Mjb3 Post Number: 130 Registered: 11-2004 |
Rhymes with Rawk, The city income tax is a major hurdle and a real obstacle to jobs and people coming back to the city. Even cities which have an income tax, have a much lower rate than Det(Lansing, Pontiac 0.5%). I worked for ArvinMeritor in SW Detroit and people who got transferred in from Troy, Brighton got an automatic 1.5% cut in pay. Nobody even talks about it anymore(KK, city clounsil). ET phone home!! | ||
Docmo Member Username: Docmo Post Number: 210 Registered: 10-2005 |
Not sure here. What is the correct spelling---city clouncil or city clowncil? | ||
Miketoronto Member Username: Miketoronto Post Number: 462 Registered: 07-2004 |
Get rid of the income tax. A study in Philly which also keeps losing people to the burbs like Detroit, found that out of people leaving the city for the suburbs, 50% left because of the City Income Tax. City income taxes do nothing in making a city healthy. | ||
The_nerd Member Username: The_nerd Post Number: 374 Registered: 12-2003 |
I hate city income taxes, but Detroit has used the tax for so long that it's a major source for its revenue. Unlike other cities, where property taxes add to the general fund, only 11% of Detroit's general fund derrives from property taxes. Until Detroit adds more taxpayers (through office jobs DT or new residents) or has a substantial rise in property values (difficult since, as mentioned above, high Prop. Tax rates depress value) the city will have difficultly lowering these valuable revenue streams. ... of course the city could save cash (and lower rates or provide better services) if city government streamlined the breaucracy and got rid of needless programs (***cough*** Manoogian, Manoogian staff, Manoogian pool, driver for wife and kids, Carlita's new ride, excessive entourage, err executive protection for the Mayor...) | ||
Detroitplanner Member Username: Detroitplanner Post Number: 845 Registered: 04-2006 |
Well nerd, how about we cut the casino tax because it is new? The casino tax was an opportunity to cut the income tax and keep the city coffers reasonably funded. They started the cut, but stopped it half-way through. Just because the tax has been around a long time does not mean that it should be exempt from review. Look at what someone posted earlier, by moving from a suburban employment place, to Detroit it was an automatic cut in his pay. Those sorts of taxes are what people remember in a negative way. Those are the sort of taxes that keep people from moving in or selecting Detroit as a possible location to live; whether they rent or buy. | ||
Trainman Member Username: Trainman Post Number: 324 Registered: 04-2006 |
The answer to cut Detroit's tax are new regional sales taxes according to our leaders in Lansing. For example a three county sales tax of one half percent for Wayne, Oakland and Macomb counties would save the city of Detroit over $70 Million per year and save the state taxpayers another $70 Million dollars per year to pay for a regional mass transit system with operating revenues of over $300 Million per year. This deal comes with the promise of more federal transit grants for light rail and community transit grants and written contracts to keep both SMART and DDOT in place. The plan like all other mass transit plans taken seriously is not simple as it included another one half cent tax for capitol to expand and maintain roads and then education lobbyists want a one percent increase. The total cost is a 2 cent county sales tax raising the current sales tax for all or most of Michigan from 6 to 8 percent. Our leaders are taking these creative economic fixes very seriously to help Michigan's economy recover from the job losses. For example, the transportation tax increase alone will create more transit jobs such as bus drivers and road construction jobs. These jobs will come from taxes but when it comes to putting food on the table it does not matter to the worker if it's taxes or industry that pays. Opponents of these taxes claim that higher taxes could discourage new employers from coming to our state. | ||
Charlottepaul Member Username: Charlottepaul Post Number: 399 Registered: 10-2006 |
That is a dream of mine too. The dream is to be more regionally cooperative like any other region. Metro Detroit basically has NO regional coop. | ||
Yelloweyes Member Username: Yelloweyes Post Number: 2 Registered: 02-2007 |
Is there anyway the citizens of detroit could put a proposal together in order to reduce the income tax that would be voted on in an election? Or is it exclusively up to the city politicians? | ||
Fnemecek Member Username: Fnemecek Post Number: 2347 Registered: 12-2004 |
quote: I have to disagree with you on this for two reasons. First, the income tax is the only tax that non-residents have to pay. When the New York Yankees bring their $198 million payroll to Comerica Park, the City of Detroit gets 1.25% of it. The same thing goes for every other game at CoPa, Ford Field, the Joe as well as all of the theatre performances around town. As a resident of this great city, if I have to chose between taxing those who live here and those who don't, well - I may be selfish, but I'd rather tax non-residents. My second point is that state and local income taxes are indeed deductible for your federal income taxes, if you itemize. In addition, Michigan residents (but not the NY Yankees, etc.) can use a portion of city income taxes paid as a credit towards their state income taxes. Between those two off-sets, the real cost of my resident income taxes pretty much disappears. | ||
Mikeg Member Username: Mikeg Post Number: 530 Registered: 12-2005 |
quote: A favorite justification for keeping the status quo by those who live in high-tax districts. It doesn't disappear, it ends up getting subsidized by other taxpayers. | ||
Fnemecek Member Username: Fnemecek Post Number: 2349 Registered: 12-2004 |
quote: Yes, just like the expense of caring for the region's poor and homeless is born disproportionately by some parts of the state. | ||
Bulletmagnet Member Username: Bulletmagnet Post Number: 11 Registered: 01-2007 |
What we need here is new thinking about taxes. Income and property taxes are just plain wrong. How about getting rid of them altogether? A consumption tax would levee an equal tax on all people, from the rich to poor, from honest to criminals, from import to domestic, and no one could escape through a loophole. I got a pay raise when I moved from Detroit, so Im not going to take a pay cut to move back. | ||
Mjb3 Member Username: Mjb3 Post Number: 136 Registered: 11-2004 |
We wouldn't need the income tax so much if they right-sized city govt(12k instead of 17k employees) and converted employee pensions to 401ks a la private sector working stiffs. But we know that won't happen w/o recievership. How long can we go before that happens. Maybe 08,09 ? | ||
Detroitplanner Member Username: Detroitplanner Post Number: 928 Registered: 04-2006 |
remove please (Message edited by Detroitplanner on February 04, 2007) | ||
Detroitplanner Member Username: Detroitplanner Post Number: 929 Registered: 04-2006 |
quote: "Is there anyway the citizens of detroit could put a proposal together in order to reduce the income tax that would be voted on in an election? Or is it exclusively up to the city politicians?" I would assume that a grassroots movement could get this on the ballot to ensure that the City Charter would not allow an income tax. The problem is apathy among voters would make it hard to get folks to sign-up to put it on the ballot! | ||
Focusonthed Member Username: Focusonthed Post Number: 813 Registered: 02-2006 |
Hate to once again bring up comparisons with other cities, but it was already done with Philly, so I don't care. Chicago does not have a city income tax. However, our sales tax is 9%, "consisting of 5% state, 2.25% city, 0.75% county and 1% regional transportation authority" according to Wikipedia. Which would you rather pay? 2.5% of your income, or what basically amounts to 3% (over most of the state of IL) of your purchases? Asking honestly, because the answer could be different for different people. | ||
Bulletmagnet Member Username: Bulletmagnet Post Number: 12 Registered: 01-2007 |
The lesser of two evils is no evil. But to entertain your premise, a sales tax would be preferable. Why? If you are allowed to keep more of what you earn, you will have more of it to spend, or not to spend, which ever the case may be. Streamlining the government on ALL levels is a must. Control over your own money is crucial as well. Please, let’s move away from the idea that all good comes from mother government, as long as YOU pay. | ||
Yelloweyes Member Username: Yelloweyes Post Number: 6 Registered: 02-2007 |
The sales tax that Chitown has works there because it is a midwest consumer destination. This would not work in the "D" because we are begging on our hands and knees for retail. The additional sales tax would make it more difficult to attract Banana Crapublic. | ||
Bulletmagnet Member Username: Bulletmagnet Post Number: 15 Registered: 01-2007 |
Allow me to expand on this a bit. I am not talking about an additional tax here. First, do away with the property and income tax (on all levels). Then replace it with a consumption tax. This would provide imputes for business to move where real estate is cheap (re: Detroit). Taxes would be paid only when money is spent. The percentage? Ill guess around 10%. | ||
Ltorivia485 Member Username: Ltorivia485 Post Number: 2922 Registered: 08-2004 |
Consumption tax? Does this include services? Right now Michigan is thinking about putting a tax on services and possibly food. Most residents are against it. | ||
Trainman Member Username: Trainman Post Number: 325 Registered: 04-2006 |
Although I believe county sales taxes can work, there are problems to be overcome. First, they need to be the same in every county because if higher in Wayne the shoppers go to Oakland. Second, the only way they would work for transit is if our state and industry invested more money. For example, if SEMCOG actually put out the 20 percent of state funds and got the $2 billion to build then a small sales tax to replace property could work but you would still have to market it and get lots of riders. Cities such as Chicago and New York get much more fare box money. The same problems that need to be overcome for mass transit are the same as for other government services. Basically, we all need to work together. For, example if everyone just rode a SMART bus once a year to go downtown, transit officials at SMART would actually recover from the Livonia loss which yes was racist, in my opinion because in Lansing they won't listen to you unless you have money and live in a large house, drive a big car and want to expand the freeways and pay a property tax to support the homeless in Detroit. We need to fight those in Lansing who want the big freeways but will not raise taxes of any kind for it without shutting down bus routes and cutting off the city of Detroit. It's time to vote out the anti-Detroit state leaders who claim that state revenue sharing does work for education or any other government service. This claim is discrimination plain and simple. Yet, these people get re-elected and they were at Livonia city hall when SMART lost. These people just did nothing and watched the city Detroit get slammed by the loss of state money for bus service because they want big roads and luxury rail. They all drove big cars. It was discrimination that caused the Livonia SMART bus elimination. When understood, the reason was the cuts in funding from the Michigan Department of Transportation and not the loss of local funds. When the facts are shown from the FTA and understood, the causes become very clear as the difference between Black and White. | ||
Digitaldom Member Username: Digitaldom Post Number: 569 Registered: 08-2004 |
Wow.. a move from one community makes everyone in the system racist? Haven't we moved past that yet? | ||
Focusonthed Member Username: Focusonthed Post Number: 821 Registered: 02-2006 |
The rest of his rambling aside, Trainman makes a valid point about the county issue. Here in Chicago, Cook County encompasses much more than the City of Chicago. In Detroit (well, to the North), Wayne County is coterminous with Detroit. So a tax would have to include Oakland and Macomb counties in order to be beneficial, or it'd make the situation even worse. Also, most people's opposition to a consumption tax is simply a knee-jerk reaction along the lines of "OMG TAXES WTF NOOOOOOES!!!" What we're talking about here is a potential decrease in property tax and an increase in sales tax. Incidentally, I mentioned Chicago's (and some immediately neighboring suburbs, I believe) tax rate is 9%. It is 11% on fast food. It costs something like an additional 10 cents to get your McDonalds. If that's too much money, make your own lunch. | ||
Detroitplanner Member Username: Detroitplanner Post Number: 947 Registered: 04-2006 |
Trainman, SEMCOG does not allocate State money. That is up to the State legislature. SEMCOG is a regional planning agency that is charged with federal road and transit dollars. | ||
Trainman Member Username: Trainman Post Number: 337 Registered: 04-2006 |
SEMCOG has a lot of power. But, they reject multiple tax mechanisms for public bus service as non-sense. The SMART operating budget now comes entirely from property taxes. There is no money allocated from the state fuel anymore to operate SMART according to figures given to the FTA database. SEMCOG could support SMART by protecting the state fuel tax if they wanted. But that would mean standing up to the trucking and road lobbyists which they won't do at this time. I'm hoping that we get mass transit leadership in Lansing that will publicly say on television I will not support a tax increase for transportation unless we pay for mass transit first. So, if you support my cause then I will go to Lansing myself and fight for you and everyone else. Please post if you want web address because I like this forum and I just want to help others. (Message edited by Trainman on February 12, 2007) | ||
Danindc Member Username: Danindc Post Number: 2131 Registered: 10-2003 |
I find it very hard to believe that Detroit's taxes are too high, and that higher taxes will only discourage development. The State of Michigan has done nothing but cut taxes for the past 10 years or so. Look how well that has worked--jobs are leaving, education is hurting for funding, and the transportation system is horrid at best. Thanks to these reduced taxes (let's not forget there is not yet a replacement for the SBT!), services are woefully underfunded, and the State and localities like Detroit are suffering deficits galore. This makes it more expensive to issue bonds that are needed for capital improvements, let alone have funds available for necessary operations like police, schools, and parks. No one wants to live in a third world hellhole, which is why people and jobs are still leaving Michigan despite the drastic tax cuts of Engler and his idiot ideologue friends. During the same time period, other cities and states with much higher rates of taxation are experiencing much more robust improvement in their situations, simply because they can balance their damn checkbook. http://www.metrotimes.com/edit orial/story.asp?id=10151 | ||
Detroitplanner Member Username: Detroitplanner Post Number: 967 Registered: 04-2006 |
Ahhh Daniel Daniel Daniel... everything is relative. In Detroit the property tax is 70 mills, there is a 2.5 percent income tax (on top of the state income tax), and insurance for your home and car are roughly twice what you pay elsewhere in the area. Nearly all suburbs do not have an income tax, have a millage rate half of the City's, and pay about half of what a City resident would for car and house insurance. | ||
Danindc Member Username: Danindc Post Number: 2135 Registered: 10-2003 |
quote: How is that different from any other large city? If taxes were the end-all, be-all, wouldn't everyone be moving to Delaware? People aren't fleeing Detroit for the suburbs because the taxes are too high. They're fleeing because they're not getting anything for the taxes they are paying. If people think Detroit's taxes are too high, let's start comparing to other large cities. I'll start: District of Columbia Property tax: 88 mills residential 185 mills commercial/industrial 500 mills vacant Sales tax: 5.75% Restaurant tax: 10.0% Income tax: First $10,000 - 4.5% $10,001 - $39,999 - $450 + 7.0% $40,000+ - $2550 + 8.7% Excise tax: 6% of fair market value of vehicle (to obtain title/registration) And I'll add that 40% of our land is non-taxable, but the population is stable, the budget has a surplus, services are improving, and the city has an A+ bond rating from Standard and Poor's. | ||
Ndavies Member Username: Ndavies Post Number: 2443 Registered: 10-2003 |
Dan, this is not the east coast. We have abundant land with few natural boundaries. We barely have any traffic congestion by east coast standards. Our major employers are in the suburbs not the city. By moving a mere 8 miles we can keep our tax rate the same, but buy a house worth twice the price of a city house. I can either give my money to the Government or build equity that I can recoup when I sell the house. High tax money is just pissed down the drain. By moving 8 miles we don't have to deal with incredibly bad city services and would pay half the amount for insurance. I own a house in Monroe county. 35 minutes from downtown in rush hour traffic. It's valued at about the same as my city condo was. My city condo's taxes were the same as my Monroe county home. But only after the NEZ reduce it to 56% of the real city tax rate. Without the NEZ I wouldn't have moved into the city. Paying twice the amount of taxes for limited city services makes no sense at all in this region. Most area employers are no longer in the city. My job isn't in the city. I took on a much longer commute by moving into the city. People wouldn't mind paying extra taxes if there was a benefit to do so. In Detroit that benefit does not exist. You end up paying extra to Inconvenience yourself. You don't receive improved services. You're not closer to work. The school system is in shambles. You're further way from the better shopping districts. Detroit City Taxes are too high for the local market. | ||
Corktownmark Member Username: Corktownmark Post Number: 251 Registered: 12-2004 |
Danindc your post about tax cuts reminds me of the definition of insanity. To do something (cut taxes) and when faced with resulting failure to do it more. | ||
Danindc Member Username: Danindc Post Number: 2137 Registered: 10-2003 |
Ndavies, I think your anecdote inadvertently illustrated my point. BTW, the Detroit region consistently ranks as one of the top for traffic congestion. Just thought you'd like to know. As far as your money going toward equity and not taxes, why is it that the higher-taxing East Coast states have seen far greater home appreciation in the past 10 years than Michigan, which has been virtually flat??? I think your confusing unrelated concepts. Again--why aren't you moving to Delaware if taxes are the major consideration? | ||
Ndavies Member Username: Ndavies Post Number: 2445 Registered: 10-2003 |
The whole tax cut/tax increase argument always misses the mark. Just cutting taxes or increasing taxes does nothing. Its's all about value for the money. City of Detroit taxes are too high since they provide no extra value for the extra taxes. We pay the highest taxes in the state yet we have some of the worst services. We look around and see that Oakland county pays far less in taxes yet has equivalent roads, better schools, better police and fire protection. When the public cry that they are paying too much in taxes they are actually complaining that they aren't getting their money's worth. The insanity is cutting taxes without improving the efficiency of government. The insanity is raising taxes just to inflate government pork barrel spending. The US auto industry is dieing because they didn't get more efficient. The Michigan and Detroit governments are also dieing because they didn't get more efficient. | ||
Danindc Member Username: Danindc Post Number: 2138 Registered: 10-2003 |
I agree that steps can be taken to improve the efficiency of government, both in the City of Detroit and the State of Michigan. To think that you can always eliminate efficiencies to the point where your expenditures fall below your revenues--that's a bit overly optimistic. I think what needs to be done, is that each city department evaluates it's bare-bones needs, and eliminates whatever costs it can. Unions would have a field day with this, so attrition would be necessary. After each department figures out what it needs to function at a bare-bones level, then you can see where the expenditures/revenues fall. If taxes don't need to be raised, fantastic. But if revenues are short, taxes should be increase somehow in order to preserve fiscal stability (with the understanding that services are going to be adequate and not mired in bureaucracy). It might not hurt Detroit to have an independent CFO or Inspector General to oversee this process in order to keep Council and the Mayor's political hands out of it. I honestly don't know if these positions currently exist, but they probably should. | ||
Swingline Member Username: Swingline Post Number: 707 Registered: 11-2003 |
Ndavies, your use of the term "city services" is too broad. I agree that many Detroiters don't get value for their tax dollar, but that lack of value is really only coming from two areas: police and schools. In other areas, Detroit might not set the gold standard, but for the most part the job is getting done. My garbage gets picked up all the time, my street lights are on 99% of the time, the fire department shows up when called, and so on. Yes, there's lots of waste, but people don't pack up and leave and take their spending and human capital elsewhere because there are too many people in the Health Department putting in 4 hours worth of work for 8 hours of pay. (No municipality should be in the "Health Department" business.) I know that I sound like Citylover, but I think that crime and bad schools (with an extra large helping of racism) drive residents' decision to leave. In every successful urban area, the tax burden is higher in the city than in the suburbs. It doesn't stop economic growth though. So what's the answer? I'd focus on the schools as the first priority. | ||
Dougw Member Username: Dougw Post Number: 1551 Registered: 11-2003 |
quote: Wow!! While the overall DC millage is higher than anything Detroit really needs, the concept of having a much higher millage for vacant property is a great idea. Does this include vacant buildings/homes, or is it just undeveloped land (with no buildings)? Here in the city of Detroit, we have: 67 mills residential owner-occupied, plus some NEZ's around 50 mills 85 mills rental / commercial / industrial / everything else, vacant or not Add to that the effects of Proposal A, which caps property tax increases for everyone (including commercial/industrial and vacant properties), and you have owners of many vacant buildings paying the equivalent of 20-40 mills. And we wonder why Woodward south of Grand Circus Park (and much of the rest of the city) is still filled with empty storefronts... maybe because the slumlords/speculators can sit on these properties indefinitely while paying almost nothing in property taxes. It's sickening. | ||
Danindc Member Username: Danindc Post Number: 2144 Registered: 10-2003 |
^The first two categories are described as "improved and occupied", so it seems like the third category applies to vacant land as well. SOURCE: http://otr.cfo.dc.gov |
