Detroit missing out on tens of millions in unpaid income taxes

May 12, 2011

About a third of the income taxes workers owe to Detroit are going unpaid, according to Mayor Dave Bing’s finance director.

Tom Lijana told the Detroit City Council today the city will take in about $226 million in income taxes this year. But he says another $110 million is going unpaid.

"That’s a critical hole in our tax system today," Lijana told council members.

He says the city will push for legislation to allow it to garnish tax returns for people who owe back income taxes:

"We need that hammer. The state has it. The state can go after a federal return. We’re asking for the same opportunity."

Lijana says employers outside Detroit should be required to have mandatory withholding for employees who are Detroit residents.

The changes are part of a deficit elimination plan the city must submit to the state. Right now, Detroit’s deficit is estimated at more than $150 million.