Will non-residents fight city tax hike?

February 5th, 2010 at 5:34 pm by 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?

5 Responses to “Will non-residents fight city tax hike?”

  1. Josh VanDyke says:

    I already avoid GR metro because of its income tax. So Go ahead and raise it.

    I think it is unfair to charge me a tax, when I have no say (vote) in how that money is spent, simply because I do not live in the city.

    at least I can vote out my congressman for rasing my Cell Phone taxes.

    1. A. Wyngarden says:

      The city of Grand Rapids is looking for a tea party of its own soon by raising its city income tax. First, they have not shown us where they have tightened their belts enough in spending, second, the city government has the same problem as the state, and national government in that it thinks it has to provide all the services for its citizens because they are handicapped or don’t have enough economies of scale to make projects work. What do they think created this country, yes good old ingenuity in times of need, looking for a better way to do things, not through government babysitting of its citizens. Finally, probably the most prominent reason the city of Grand Rapids needs to re-evaluate its tax increase proposal, is that it contradicts another ideal this country was built on: NO TAXATION / WITHOUT REPRESENTATION. The city is asking its non-residents to contribute to the city’s coffers without any representation. Of course they might say that the tax is for the wonderful privilege of working in the city and providing others with jobs. The truth of the matter, is that no government has ever created more permanent jobs through the tax money it has raised than the private sector through the increase in small businesses by the growth in small business entities and not taxing businesses to death. If Grand Rapids would like to be well on its way to looking more like Detroit, then keep it up, and you will find that people will leave this city, just like they are leaving this beautiful state, because the buisness climate is terrible, and everyone has overspent their budget for so long that there is no money left for a rainy day. Of course government also has a good hand in perpetuating this situation in that when it comes time to budget, if a particular dept. does not want to get its budget cut, then it must use all of it the previous year. So if you are a government employee, there is no incentive to save money, unless its in someone else’s dept., otherwise you use all of the money budgeted under the idea of self-preservation. This is just a little something to think about city of Grand Rapids, because we’re non-residents and without representation, we’re not going to take it anymore. REMEMBER: NO TAXATION, WITHOUT REPRESENTATION!!!!!

  2. Bill Steffen says:

    Brings to mind the famous Revolutionary War slogan: “No taxation without representation”. Question…is there any difference between residents and non-residents in fees for any city service or event (pools, parks, etc.) or anything limited only to city residents? It might be more fair to include taxpaying non-residents (who could be given a card through their employer) along with city residents in the fee schedule.

    Let’s say you’re a professional (doctor, lawyer, CPA) who makes a taxable 150K a year – you’d save $1,125 by locating across the border in Wyoming or Kentwood. Over 10 years that’s $11,125. That might have some bearing. Also, I see that cities like Wyoming, Kalamazoo, Kentwood and Portage do not have a city income tax. Why does Walker (with a decent commercial and property tax base) need a city income tax, yet these other cities don’t? Many in state government want to raise taxes. The Federal government is going to raise fees and taxes. Look at what happens when the “Bush” tax cuts disappear:

    By Kevin McCoy, USA TODAY

    Americans of every income have benefited from a drop in federal income tax rates as Bush administration tax cuts enacted since 2000 took effect, an independent analysis of newly released IRS data shows.

    But those earning $75,000 to $500,000 are shouldering a larger share of total taxes paid as millions more of them earn higher incomes and get hit with the Alternative Minimum Tax, the analysis also found.

    The review by the Tax Foundation, a non-partisan research group, provides one of the first detailed looks at the impact of federal tax changes phased in between 2000 and 2004.

    Gerald Prante, a Tax Foundation economist, said, “It is true that in dollar amounts the rich have gained the most. But everybody’s tax rates have fallen.”

    The analysis showed, for example, that a taxpayer who earned $35,000 in 2000 would have paid 8.54% of that income — $2,989 after credits — in federal taxes. In 2004, federal taxes would have accounted for 5.12% of that taxpayer’s annual income, or $1,792. That represents a 40% decrease in tax burden.

    …the projected deficit for this year’s Federal Budget of 1.56 trillion dollars represents a debt of $11,147 per employed person in the U.S. That’s just for ONE YEAR! That is simply not sustainable. For 10 years that would be $111,147 each employee would owe to pay back the debt for just those 10 years! What are we doing to our children and grandchildren?

  3. Sandi says:

    Kind of off subject – but just received newsletter from Plainfield Twp. Robert Homan, supervisor, talked in his column about Nov 2 vote for Constitutional Convention. Why haven’t we heard about this in the media? Seems to me this is a vitally important subject that all voters should know about.

  4. Anne Schieber says:

    The GR Chamber of Commerce has come out swinging already on the commission’s decision to put this one on the ballet. The members are probably getting an earful from their non-resident employees. Just an observation

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