Mason Gaffney and Polly Cleveland teamed up recently to write an article for the Huffington Post discussing the history of the property tax in Detroit.
“The Georgist Progressive movement supported cheap mass transit on trolley cars. With fixed costs funded by property taxes, fares stayed low. Property taxes also paid for public education, public health, public parks, water, sanitation, welfare — all the public services that make a big city livable, and its small industries viable. Property tax rates of 2.5 percent of market value were normal; there were no sales taxes, business taxes, or income taxes. Detroit’s private sector was a big collection of small machine shops, little businesses and services. That’s what attracted Henry Ford, the Dodge brothers and other young tinkerers to Detroit. In one of history’s ironies, trolley cars nursed the auto industry that later rose up to slay them.
In 1897 Pingree became governor. He centralized the assessment of property taxes, and had the State Board of Tax Commissioners revalue all property. They found so much untaxed land, especially railroad holdings, that they actually lowered tax rates even as they raised more taxes.”
The article can be read here: