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Sep 21

A City Income Tax

Comments (0) 12:00 AM posted by admin |

Here’s some unsolicted advice. If you are trying to get yourself elected Mayor of Ypsilanti in 2006, don’t offer up a plan to implement a city income tax.

There are currently twenty-two cities in the state of Michigan that have a city income tax. The largest of those are Battle Creek, Detroit, Flint, Grand Rapids, Lansing, Pontiac, and Saginaw. The most important question to ask is: Does Ypsilanti want to emulate those cities?

By law, the highest the City income tax could be is 0.9063 mills for residents, and half that for non-residents. Depending on what the exemption allowance is (if any), the tax could be wildly regressive. Members of City Council would like some kind of reduction in property taxes to go along with an income tax, but there wouldn’t be any point to a such a measure if revenues stayed relatively equal. There’s no guarantee that the population would even endorse a plan like this. But if they did, get ready to pay.

The logical (and maybe only) solution to this is economic growth. I have no doubt that if you asked the members of City Council whether or not they have done everything possible to exhaust all avenues in attracting new business, they will tell you they have. If the City thinks it’s tough to attract people looking to open businesses now, then how difficult is that task going to be when there is an income tax? An income tax will double the burden of the state’s Single Business Tax. Raising taxes is a short-term solution that is bound to be followed by an exodus of residents. It’s then that the City will be permanently stuck in a budget crisis.

Panicked. Incompetent. Naive. Unfit. Pick your adjective. I have mine.

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