This is demonizing EMU employees, rather than accepting responsibility for poor financial decisions like Water Street. EMU employees are paying their fair share, and Ypsilanti would be far worse off it didn’t have EMU as part of its community. In any case, the supporters of the income tax overestimate how much the city can realistically collect by soaking our disenfranchised friends at EMU.
Non-resident employees, including those at EMU, can exempt themselves from the tax simply by recording the number of hours or days they spend in meetings, trips, or work outside the city. At tax time, they can claim a reduced number of work days in the city, and thus not pay the city income tax for those days. Ypsilanti will not have the resources to audit these returns, which would require a gaggle of new auditors and tax collectors to investigate personal and business returns. The City of Detroit estimates that nearly half the money due under its city income tax is never collected.
If you don’t live in Ypsilanti, it will be very easy to legally avoid much of the city income tax. But residents of the city are stuck: they will pay twice as much as non-residents, and they will pay it on all of their income, regardless where it was earned.
Worse, if you work in a city that already has a city income tax and live in Ypsilanti, you must now file two city tax returns, and apportion the income tax correctly across both communities. Ouch!