Thursday, March 29, 2012

Raising City Taxes is counter-productive.

I sent the following letter in response to the mayor's suggestion that the cap on city income taxes should be lifted. The headline of the article was: Bing seeks state help to raise revenue for Detroit


Dear Editor:


Unfortunately, most of our City's elected leaders appearclueless about how to move the city forward once the current financialcrisis is past. Fortunately, the soon to be implemented Council byDistricts structure will result in new employment opportunities formany of current City Council members. Employment opportunities thatdon't include the City of Detroit.  Only then, will our Citygovernment begin to be accountable.

Yes, basic city services are severely lacking. Yet, many of us chooseto move to Detroit (in my case, from Los Angeles), or to stay. Not forcity services, but in spite of the lack of city services. To encouragegrowth Detroit needs to remove the financial disincentives that discourage people from living and investing in our City. Major disincentives include the City's income tax, property tax rates, and automobile insurance rates that penalize city residents. Detroit should embark upon a five year step-by-stepreduction of the income tax. At the end of five years, the tax wouldbe eliminated. Additionally, the property tax should be pegged to themedian of the tri-county area. This would help to make Detroit housingmore attractive to residents, current and prospective. Cutting the taxrates, although painful in the very short term, would result in anincreased tax base. Raising the city's income tax now is not only short-sighted, but disastrous in the long-run. 
Thomas E. Page

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