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Talk of eliminating city income tax is reckless

There has been growing talk among some city council candidates and others in the community to eliminate the city’s income tax.
There are 23 communities in the state that have such a tax. In Hamtramck, it brings in $2.2 million a year – which is a significant chunk of change, considering that the city’s annual budget is about $16 million.
While the collection is a major revenue source, it doesn’t really hit most folks that hard on their yearly income.
For those living here, the income tax is set at 1 percent. For those who work here, but don’t live in the city, it’s a mere ½ percent.
The argument for eliminating it is based on the notion that by doing so, it will somehow how spur economic development.
Even if that could be proven, it would have to basically happen overnight to offset the loss of $2.2 million a year.
The talk of wiping away the income tax is reckless and ignorant. Only folks who have no idea just how tight our city budget is would be behind this proposal.
As it stands now, the city is in deficit spending mode, and it threatens to erode our $5 million budget surplus a few years.
Add to that, the city is going to be losing about $800,000 a year when GM’s Poletown plant closes, starting in January.
And, the federal SAFER grant that pays the salaries for 12 firefighters also just went away.
We find it ironic that some of the folks who want to do away with the income tax are against allowing medical and recreational marijuana sales in town.
Allowing this legal sale of marijuana would allow Hamtramck to tap into monies the state will collect in sales taxes and other fees.
The naysayers argue that allowing marijuana sales – even if the sales locations were confined to remote parts of the city – would somehow influence children.
Or worse, yet, kids would be able to get their hands on pot.
Well, we have liquor stores and a dozen or so pharmacies that sell controlled substances, and there hasn’t been a noticeable effect on our youth.
Hamtramck needs more money, not less, if it wants to remain financially sound.
What we would like to hear from candidates are actual, workable plans to bring in more revenue.

July 26, 2019

8 Responses to Talk of eliminating city income tax is reckless

  1. Nasr Hussain

    July 26, 2019 at 5:23 pm

    Trying to connect economic development to marijuana sales is illogical. Increased cost of litigation and police enforcement will wipe out any gains of marijuana sales. If what you’re claiming is true, then let the city conduct and independent study showing how much gains will be realized by allowing marijuana operations in the city.
    Wishful thinking has led us nowhere in the past but to more lawsuit and hundreds of thousands in payments to settle lawsuits.

    In today’s Free Press:
    https://www.freep.com/story/news/local/michigan/detroit/2019/07/26/medical-marijuana-growers-sanilac-county-michigan/1821030001/

  2. Dennis Nowak

    July 28, 2019 at 4:12 pm

    Eliminating the Income Tax Ordinance is plain unwise and dangerous – the danger being in potential economic ruin to the city.

    This would result in serious rollbacks in vital city services – such as police and fire dept. operations, building inspections, and sewer infrastructure maintenance.

    The city’s financial experts could tell you the same thing.

    Mohammed Hassan’s campaign rantings about abolishing this source of Tax revenue for the city is mere political grandstanding and has NO basis in common sense.

  3. Nasr Hussain

    July 29, 2019 at 1:16 pm

    This decision should be decided by the voters, a mileage proposal to replace lost income tax placed on the ballots will be the best way to decide this issue.

  4. Kevin Waskelis

    July 29, 2019 at 8:16 pm

    The local income tax should not be eliminated – but it also should be changed to a progressive taxation system where higher incomes pay more. A single flat tax is unfair and coupled with property tax and sales tax, Michigan’s tax system puts a higher burden on lower incomes who can afford it the least.

  5. Informed

    July 30, 2019 at 6:20 pm

    For a guy who pretends to know everything Nasr sure is ignorant. The millage is at the state maximum and can’t be raised, even with voter consent.

  6. Nasr Hussain

    July 31, 2019 at 12:59 pm

    @Informed

    a quick internet search will surely clarify to you that thisis not the case:

    https://www.michigan.gov/documents/taxes/2018_TOTAL_RATES_-_report_648639_7.pdf

    a lot of cities have millage rate that’s much higher than Hamtramck’s.

  7. Nasr Hussain

    July 31, 2019 at 1:02 pm

    And even without a millage, a correct and more fair assessment of Hamtramck property values will generate more income that will negate the need for an income tax.

  8. Sleepy Joe

    August 12, 2019 at 11:27 pm

    We don’t even have basic services like Recycling, how is there even talk about removing such an important revenue source. Especially when it’s of such minimal impact to the residents.

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