As the largest American city to ever file for bankruptcy, all eyes will be on Detroit as the courts and the media dissect its fiscal policies. One such policy will be the city’s treatment of tax dollars, both its ability to earn them and its ability to spend them wisely.
One pervasive criticism of the Detroit tax system is that the property taxes are too high. Indeed, according to the Tax Foundation’s survey of property taxes in 2009 , Wayne County (where Detroit is located) was ranked 3rd out of 792 counties for property tax as a percentage of home value. Wayne County also ranked 54th for property tax as a percentage of income. Critics point out that this could have contributed to the individual and corporate reluctance to live or establish a business in the city, reducing the city’s overall tax base.
Refunds for overpayment of these high property taxes are stalled as the city negotiates its debts and the order in which they will be paid. Some people are refusing to pay upcoming bills. Indeed, the city itself owes $1.2 million in back taxes on its 36th District Court Building.
Despite the bankruptcy proceedings, Detroit remains on schedule for construction of a brand new $650 million hockey arena, which will be paid for with $284 million of taxpayer dollars. Some argue the prudence of spending so much on a sports stadium when thousands of city employees lose their pensions, but proponents of the stadium argue that the tax money used for the project will come from economic development taxes which are completely separate from the city’s general fund. Furthermore, the stadium will theoretically draw increased investment in the surrounding area, ultimately helping the city increase revenues.
Of course, some have thrown out some more drastic ideas for saving Detroit , including eliminating all taxes, turning the city into a tax shelter similar to the Caymans, or even giving the city to Canada.
Detroit will likely remain an American city for now, as it struggles to navigate bankruptcy and to ensure any tax policy changes pave the way for a better city.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)