Will non-residents fight city tax hike?February 5th, 2010 at 5:34 pm by Anne Schieber under News
Higher Income Tax for the City of Grand Rapids
This week, City Manager Greg Sundstrom announced intentions to increase the city’s income tax. Until recently, the trend in some cities has been to eliminate the personal income tax - not add to it. The thinking has been by reducing income tax, cities might be in a better position to attract employers. After all, city income tax makes paychecks smaller and that could put pressure on employers to cough up the difference.
There are 22 cities in Michigan with an income tax. Grand Rapids charges residents 1.3% and .65% for non-residents who work in the city. The proposal would raise rates to 1.5% for residents and .75% for non-residents. On a salary of $50,000 a year, the increase would cost residents an extra $100 per year, non-residents, an extra $75 annually.
Income tax raised $58,259,600 for the city in 2008. Roughly one-third of that, $17,023,591 came from non-residents. The remainder came from residents and business. Sundstrom wants to put the increase proposal on a ballot, however only residents will be allowed to vote. It will be interesting to see how the city’s non-resident workers. Will they ask, taxation without representation?