Tax Breaks Cost Detroit?

This screaming headline declares that Detroit's declining tax revenue is partially caused by drastically reducing property taxes in special new-growth areas. Hogwash! If Detroit's city council really wants to see how fast their tax revs will slip, just go ahead and recind this practice. Or, better yet, to see how over-taxed populations will produce increased tax revenues, apply the tax reductions to the entire city, and make them perminent; currently they are temporary and apply only to select areas.

Basically what's happening is that the vast majority of the city does not qualify for these property tax reduction. Meanwhile, small portions of the city get these temporary reductions. The smal special areas are experiancing a boom in new home construction and increase in residents, while the vast expanse of Detroit which has the highest property tax in the metro area -- and the least amount of service -- is experiancing an exodus of residents, to the tune of about 100,000 per year.

In the area where the taxes apply, the building permits in ten years have increased 100%. If only the reporter (and more importantly, the city council members!) knew enough about economics and logic to seperate these analysis: What was the property tax revenue ten years ago IN THAT AREA compared to today? The article claims that many peole purchasing these new homes are "merely" moving from other parts of Detroit, but fails to ask: if the tax breaks didn't exist, would they move instead to the lower-tax subburbs?

1 comment:

Paul Hue said...


This is a sensible response to the nonsensicle report.