A bill to amend 1967 PA 281, entitled “Income tax act of 1967,” by amending section 512a (MCL 206.512a), as added by 2003 PA 28.
House Bills 4966 to 4970 would create the Land Tax Equity Act. The bill is intended to allow the city of Detroit to put the option of an LVT before the city’s voters. Supporters of the bill argue that the current property tax system in Detroit overly burdens homeowners and others who develop their property while incentivizing speculators to sit on undeveloped or blighted lots on which the property taxes remain very low. They contend that instituting an LVT would benefit residents and small businesses by allowing the property tax burden to be shared more equally by all and would incentivize speculators to develop their vacant or blighted property. Some raised concerns that bill would lead to the government picking winners and losers by raising taxes on some businesses that use undeveloped land, such as scrapyards or parking lots, and lowering taxes on others. Supporters of the bill countered that the same LVT rate would be levied on all land in the city (as is required by the uniformity clause17 of the state constitution). Opponents of the legislation argue that it is being rushed and not enough time has been given to consider the potential complex economic effects of creating an LVT. They contend that there are other, more proven ways of achieving the desired goals, such as local sales or excise taxes or a capital gains tax. They also argue that, while the bill aims to be revenue neutral, there is no way to guarantee that beyond the first year of the tax.
Co-sponsored by Reps.
Referred to the Committee on Tax Policy
Reported without amendment
