Newt Gingrich, Jennifer Granholm spar over tax-free Detroit proposal
Former U.S. Speaker of the House Newt Gingrich proposed Wednesday on Mackinac Island that the state of Michigan declare Detroit to be a tax-free zone for the next 10 years in an effort to generate economic activity.
"Let's pretend Detroit is Puerto Rico for 10 years," Gingrich said, according to a report on MLive.com. "No taxes for a decade on job creation. No taxes on investments. No taxes on capital gains as long as they are in Detroit."
Gingrich's proposal, delivered at the Detroit Regional Chamber's annual Mackinac Policy Conference, spark a wide range of reactions.
Former U.S. Speaker of the House Newt Gingrich addresses the Mackinac Policy Conference on Wednesday.
Bill Emkow | MLive.com
Gov. Jennifer Granholm, for one, thinks it's unrealistic.
"The state and local component provide direct services. Nobody's going to come to Detroit if there is no law enforcement," Granholm said on WJR-AM (760), according to the Detroit News. "Is Oakland County going to subsidize Detroit's law enforcement efforts?"
Gingrich
also proffered a variety of other ideas for revitalizing Michigan's
economy and Detroit, including establishing Michigan as a "right to
work" state, giving schoolkids Kindles instead of textbooks and aggressively replacing failing schools.
Some attendees seemed to welcome his ideas. Detroit City Council President Charles Pugh told MLive he liked the tax-free Detroit proposal.
"I'm not a Republican -- I'm the farthest thing from it -- but that's just a good idea," he said. "Some people will tell you Detroit is in a depression. With the level of unemployment. With the high dropout rate. With so many aspects. We need an injection of not only hope, but jobs. That's just real. And what we've been doing has not been working."
Detroit NAACP Executive Director Heaster Wheeler was disgusted.
"Newt Gingrich is less than a joke," Wheeler told the Detroit Free Press. "If he understood the needs of the urban centers of America, where was he when he had the authority to do something about it as speaker of the House?"
On the other hand, U.S. Rep. John Dingell, D-Michigan, didn't write off Gingrich's ideas for Detroit.
"I am thinking about it," he told MLive. "Newt is very provocative, and he's caused me to consider the idea."
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
snapshot
Mon, Jun 7, 2010 : 1:31 a.m.
I'm not sure this is such a bad idea if implemented in the proper manner. I'm sure the UAW will try to get an even bigger piece of the dissappearing taxpayer pie, but hopefully we could circumvent their avarice actions. In addition to a "no tax zone" we could promote a "colonization" of the many abandoned Detroit neighborhoods. This worked to expand the great United States and the territories of many other countries.
cmf_a2
Sun, Jun 6, 2010 : 8:41 a.m.
Regardless of the parties, the plan needs to be more thought out -- elimination of taxes leaves no money for the necessities in Detroit. The police, schools, and most likely other administrative jobs within the city will be lost due to lack of revenue. Does this mean the local businesses such as restaurants, parking lots, hotels, sports, and casinos get their taxes reduced? If it is not safe, then who will go to these places? There has to be a balance between expenditures and income. I for one need to see more detail from Mr. Gingrich.
earl
Sat, Jun 5, 2010 : 9:43 p.m.
the current plans for Detroit are to convert much of the vacant land to agricultural use. what kind of jobs can the remaining residents expect from that plan? sharecroppers? Detroit as it it stands is not self supporting. all it generates are deficits which have to be made up by taxes from the rest of the state and the country. Right now Detroit is boat anchor around the State of Michigan. Adopting Newt's plan would turn the city around. Business and individuals would flock TO Detroit instead of running to get OUT. (Read the article in the WSJ about "Black Flight from Detroit- 6/5/10) Detroit would turn into a ballon that would lift the fortunes of Michigan rather than dragging it down. It may actually pay the rest of the state to subsidize the police and fire department of detroit. Perhaps a small residency fee could be charged for everyone who works, lives and does business within the city limits, but I mean everyone, even the poor. the proceeds could ONLY be used for police and fire protection, nothing else. as for the politicians, they can work for free. My only concern is that it may work too well and draw too many resources from the rest of the US and that detroit may become too crowded. Wouldn't that be a great problem?
Ralph
Fri, Jun 4, 2010 : 5:48 p.m.
Most Americans have no credit and are borrowing to service their debts. I pity the idiots running for governor, there's not much a Republican or Democrat can do. Watch out for the M3 money supply!! The amount of cash in the system is shrinking and with the stock market drop of almost 325 points today good luck.
Carl Duncan
Fri, Jun 4, 2010 : 12:33 p.m.
The rest of the state is pretty much subsidizing Detroit as it is. Another tax increase would be consistant with democratic party principles, and the evidence is there for every one to see. Detroit has been going through change. However, the greening of Detroit, back to the future, government owned farms were probably not part of central planning's original plan.
John Q
Fri, Jun 4, 2010 : 11:56 a.m.
Newt's laughing all the way to the bank. He recycles typical Republican talking points and gets paid handsomely to do it. Nice work Mr. Speaker!
Do not taunt Happy Fun Ball
Fri, Jun 4, 2010 : 10:01 a.m.
Like I said - If you really want to blame Republicans (or the Heritage Foundation) - you should visit a psychiatrist regarding anger issues. Taxes kill business investment - every time. The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business. And detailed Internal Revenue Service data show that the across-the-board rate cuts of the early 1920sincluding large cuts at the top endresulted in greater tax payments and a larger tax share paid by those with high incomes ("the bad rich people"). For more: http://article.nationalreview.com/268186/lower-taxes-higher-revenue/bruce-bartlett
rusty shackelford
Fri, Jun 4, 2010 : 8:49 a.m.
If Detroit had no taxes, the rest of the state would just be subsidizing it. So I'm not sure how a Republican gets behind this idea. No taxes, sure, but then it would lead to higher taxes or reduced services for the rest of the state. The rest of the state will never agree to that. Non starter. Stupid idea.
Edward R Murrow's Ghost
Fri, Jun 4, 2010 : 8:47 a.m.
Tax cuts don't boost revenues except in the la la land so conservative so-called think tanks such as the Heritage Foundation. Among many many references on this subject, see: http://www.time.com/time/magazine/article/0,9171,1692027,00.html And, as I said before, someone needs to take an introductory high school civics class if they think that any governor, without the support of the legislature, could have undertaken the major efforts necessary to turn around our state's economy.
Do not taunt Happy Fun Ball
Fri, Jun 4, 2010 : 8:04 a.m.
First - to try to blame Republicans for the Eight "blown away" Years of the Granholm Administration is pure ideological blather. If you really want to blame Republicans - you should visit a psychiatrist regarding anger issues. Granholm is and was the Governor of the State - she has tremendous powers and deep information on all industries. She is responsible for her actions and for the State. Her tactics failed - cheer-leading aside. She decided to follow the Unions and and the Greens and she has paid the price with the loss of One Million State Jobs; that will be her legacy. Second, the Detroit Free Tax idea is a good one. Every time the US gov drops tax rates - Total Cash Receipts to the Fed actually Increases. We need incentives to work - not freebies. And business sure as heck can't compete against Gov give ways, high regulatory hurdles, and free-for-all social programs. If this plan can protect basic services (police, fire, etc.) then it should be attempted. Is there really anything left to lose in Detroit?
Edward R Murrow's Ghost
Fri, Jun 4, 2010 : 7:35 a.m.
stunhsif: We never agree. On this we do. An interesting half-idea. So how would you replace the lost revenue to fund Detroit's services? Gingrich, ever the hand grenade thrower, didn't bother with that half of the idea and, lacking an answer to that question, this is just an idea that has no hope of being implemented. Good Night and Good Luck
stunhsif
Fri, Jun 4, 2010 : 7:02 a.m.
"Heaster Wheeler was disgusted" He said: "Newt Gingrich is less than a joke" Yep, mud slinging is going to solve all of Detroit's problems. Mr. Wheeler needs to go look in the mirror and stare at himself for a few minutes! What ideas do you have Mr. Wheeler to bring Detroit back?
Patriot
Fri, Jun 4, 2010 : 5:58 a.m.
Ask yourself - why is the great city of Detroit remaining in the decline for so long now? Who would invest and risk their assets in Detroit? Incentives are what drives America. Obama and his administration have given more incentives to people than anyone else in history. And to save what - failed banks, failed auto companies, failed healthcare....... So why not give an huge incentive to draw EMPLOYERS back to invest in Detroit. Without employers to employ people the city perishes - period. Besides, what other reason would any company come and invest in Detroit if they did not receive hugely favorable incentives? There are none. This is a great idea. Grandholm and the State Rep's are mad because they could have done this long ago and refused and keep insisting on raising taxes - who only serves to drive employers and people away from the city and State even more. Stimulate Detroit by creating REAL jobs that employ people to make or create something other than more welfare or public assistance needs.
David Briegel
Thu, Jun 3, 2010 : 5:47 p.m.
Well, at least Newt isn't on the "family values" kick. I wish someone would ask if they were the family values of his first, second or third marriage or which of his "administrative assistants"? And his latest broadside against Obama would have been considered treasonous had one of us "evil liberals" uttered such foolish blather against "commander in chief" Bush in a time of war! The truth and the lie. This is America. They are "equal"! Newt has no credibility to speak out against anyone since he was asked to leave after shaming his already shamed Republican majority!
Atticus F.
Thu, Jun 3, 2010 : 1:23 p.m.
I'm a Democrat, but in my oppinion, Granholm hasn't done anything to make things better in Michigan.
a2grateful
Thu, Jun 3, 2010 : 1:07 p.m.
40% of the land within Detroit city limits is vacant. It is being planned for agricultural use. Who would have thought that Ann Arbor's greenbelt would include the city of Detroit? Detroit no longer needs trains... Now it needs tractors... : (
Edward R Murrow's Ghost
Thu, Jun 3, 2010 : 11:05 a.m.
Anyone who thinks the governor can wave a magic wand and do what they want need to go back to remedial high school civics. Granholm had a Republican-controlled legislature for her first term and a Republican-controlled Senate for her second. Republicans in the state legislature, as they are doing in Washington, refused to work with the governor in constructive way to solve the state's problems. Their goal was to defeat her politically, whatever the consequences for the state, and we are now living those consequences. As for Gingrich's proposal, it is an interesting one. But, as the governor points out, it's only half an idea. How to make up the lost revenue? How to fund Detroit police, etc....? Until Gingrich is willing to come forward and answer that question, this has to be seen as another example of his willingness to throw political hand grenades. Good Night and Good Luck
Patrick Maurer
Thu, Jun 3, 2010 : 10:57 a.m.
Jennifer only had eight years to do anything and we all know a politician can't get anything done in eight years. Give me a break!
uawisok
Thu, Jun 3, 2010 : 10:46 a.m.
If Granholm is the worst I guess the would make Engler the worst squared!! She has not presented ideas well to the public in the last couple years, but she was also given a defecit hole to climb out of 8 years ago by Engler and 8 years of NAFTA effect jobs leaving Michigan for Mexico(low wages) and Canada( no health care cost to corporations). Of coarse let's not forget the great Reaganonmic deregulation depression of the last 18 months!!
candace
Thu, Jun 3, 2010 : 10:37 a.m.
We are all going to be partying when Granholm is out of office. Worst. Governor. Ever.