Can Detroit Afford A City Income Tax?

Many Detroiters like Robert and Charlita Frazier take the Detroit Income Tax in their stride.  Robert is a barber.  It’s his second career following retirement from GM.  Charlita is in real estate.  It is her second career too.  The couple live above their Detroit barber shop.  It is both economical and convenient to do so.

Like other Detroiters, the Fraziers pay 2 1/2 percent of their income in city taxes.  And they pay a one-percent tax on their business.  Charlita says, “I never questioned it before, it’s part of the lifestyle.  It’s part of the tax base here.  And I never had a reason to say its too high or too low, so I accepted it.”

But Detroit Mayor Dave Bing says he isn’t ready to just accept it.  He says the tax puts the city at a disadvantage, “We’re one of few cities that are set up that way.  And a lot of complaints from businesses is it is an added cost to them.  And so we’ve got to figure out, over the long term, how we level that out and start reducing it.”

Another issue the city must face is the shrinking of the middle class.

Mayor Bing told us, “We’ve lost a lot of our population.  And most of our population loss has been in the middle class.  So it hurts us significantly in the City of Detroit because you’ve got people who are financially challenged more than anything else that are still left here and we’ve got to deal with that.”

The mayor also said fewer residents means fewer tax dollars.  So the city needs the money to keep services at the current level.

When we asked the mayor if this would be the time to get rid of the city taxes, he told us,”Not yet,”

Sometime? we asked.

He said, “Sometime we need to, no doubt about it. ”

But you can’t afford to at this time?

“Can’t afford it.”