The Detroit tribune., 1962-07-21

Gty Income Tax 10 Yield
IS Million Dollars

Detroit started the solution of its financial difficulties
Sunday July the effective date of the city income TAX
which is expected yield S35 million dollars annually
Legality of the tax which has been argued for almost
six months was bolstered July by opinion from Cir
cult Judge Neal Fitzgerald in which he held that It is
legal impose income tax on the earnings OF Detroit
residents and nonresdents who work in Detroit
Attorneys who have opposed the tax ordinance and
fought against it in court have stated they will carry
Ftzgerads ruling the State Supreme Court for an ap
peal
Although results of an appeal must await the Supreme
Courts decision is welknown that Fitzgerald is rarely
reversed in the higher In the income tax be-
fore him. the Judge particularly dligent IN the re
search and precedents which he based his decision
The anticipated s35 million dollars will come from
/ per cent the salaries other earnings OF APP
proximaely 100000 Detroit residents and 10000 non
residents of the city.
Most employers are using Withholding tax system SINH
lar to the Federal Income Tax Code for employees who
residents of Detroit for nonresidens who perform
% per cent or more of their services in the city
The forms designated DIVA available at the
City Controllers office forms to be used by persons
who do not come under the Withholding system.
While not subject to Withholding. persons such
as domestic help who paid wages professional
brokers and other independent contractors who are not
employees of the payer required to file declaration
and return and pay the tax if subject to il under the or
dinance.
An example of the tax person will pay is an en-
ploye who makes least 500 week and less than slO2
and who lists three dependents The city tax to 5e paio
weekly in such example would be 66 cents.
The of will be or less than the
ample used depending the amount of wages person
makes and the number of dependents claimed
In addition to wages earned the ordinance provides
that the per cent tax also must be paid all dividends
interest capital gains less capital losses from
tates and trusts net profits from real and tangible per-
sona property and rentals to the extent that and the
hacic hlo ha ntor al
Revenue Code
Mayor Jerome Cavanagh has been reluctant to com
ment in detail the court decision claiming the or
dnance legal
81 am grafed that the court has sustained the ctys
position Cavanagh said III would be improper for the
city to comment further because of the probable appeal
to the State Supreme Court.
In spite of the mayors brief comment it was evident
when Fitzgerald decision reached his office that Cavanagh
City Controller Alfred M Pelham and Assistant Corpora
ton Counsel John II Wherspoon principal authors of
the ordinance ubant
Detroit now along with than 400 other cities
throughout the United States who city income tax
may have found the solution annual financial aches
and pains.
Because of the newness of the ordinance and the multi.
plcly of questions arising unusual cases involved a
set OF rules and Regulations being prepared to supple
men the ordinance and after they adopted by the
City Council copies may be obtained from the City Con-
troller'S office
Questions relative to the tax ordinance and re-
quests for forms also be addressed and obtained from
the City Controller at ITO CityCounty Building