Detroit's Free Market Island

[MachineGhost]

Here's the scenario for the Commonwealth of Belle Isle that Lockwood and others want to see: Private investors buy the island from a near-bankrupt Detroit for $1 billion. It then would secede from Michigan to become a semi-independent commonwealth like Puerto Rico and the Northern Mariana Islands.

Under the plan, it would become an economic and social laboratory where government is limited in scope and taxation is far different than the current U.S. system. There is no personal or corporate income tax. Much of the tax base would be provided by a different property tax — one based on the value of the land and not the value of the property.

It would take $300,000 to become a "Belle Islander," though 20 percent of citizenships would be open for striving immigrants, starving artists and up-and-coming entrepreneurs who don't meet the financial requirement.

Among the citizenship requirements are a command of the English language, a good credit rating and no criminal record. Mogk adds that such a scenario would make the island "a drain of talent and resources" at the expense of Detroit.

http://www.detroitnews.com/article/2013 ... /301120319

[Pointedstick]

What? A feasible plan that would solve the city's financial problems, represents the kind of innovation in government that progressives are always clamoring for, and garners support from a majority of those polled? Clearly this is part of a sinister plutocratic agenda pushed by the Koch brothers, Goldman Sachs, and the NRA to grind down the poor on the alter of unregulated capitalism for the private enrichment of a few billionaires!!!1!!!one!  The real solution to Detroit's woes is definitely higher taxes on the 1%.

[Reub]

It would be like Puerto Rico but with lousy weather.

[RuralEngineer]

Detroit can't be salvaged.  Bulldoze the whole thing and turn it into farmland.

[doodle]

This reminds me of those studies that show how private school education is cheaper and more effective than public school education. Of course what they fail to mention is that the private schools just kick out all the troublemakers and difficult kids whose issues then get offloaded onto the local public school. Doesn't prove much of anything.

If this little island were to be a legit microcosm they would need to import drug dealers, gang bangers, schizo alcoholics etc. etc.

[brick-house]

doodle wrote:

This reminds me of those studies that show how private school education is cheaper and more effective than public school education. Of course what they fail to mention is that the private schools just kick out all the troublemakers and difficult kids whose issues then get offloaded onto the local public school. Doesn't prove much of anything.

Good summary of why I send my kids to private school.  However, the cost of private school is in addition to the taxes I already pay for the public school.  So - I pay for the trouble makers, difficult kids, etc in addition to my children's actual education cost.  Thankfully, the private school keeps the cost reasonable. 

As for the island idea, isn't Detroit already a welfare/social services island?  Isn't the problem that most of the tax producing population of the Detroit Metro area live in the suburbs?  Whatever revenue Detroit would gain from selling the island would be spent in a few years except that now they would be short one island...

[TripleB]

How would you get out of federal taxes and FICA? Presumably you'd be a US Citizen still, like Puerto Rico.

I can't imagine someone could buy the island and secede from the US entirely.

I do think if the 1% was able to move to an island with good weather, near the US, without the taxes and regulation, it would be the demise of the US because I believe the 1%ers carry the other 99%.

Full Disclosure: I'm a 99%er.

[D1984]

How would you get out of federal taxes and FICA? Presumably you'd be a US Citizen still, like Puerto Rico.

I can't imagine someone could buy the island and secede from the US entirely.

I do think if the 1% was able to move to an island with good weather, near the US, without the taxes and regulation, it would be the demise of the US because I believe the 1%ers carry the other 99%.

Full Disclosure: I'm a 99%er.

Puerto Ricans who are "bona fide residents" of PR (don't know exactly how "bona fide resident" is defined....does this mean they spend more than half the year in Puerto Rico and are legally resident there i.e. Puerto Rican address, driver's license, etc) don't pay Federal income tax. They pay Puerto Rican income tax which has similar brackets but the personal exemptions and deduction sare less so most Puerto Ricans pay a little MORE in taxes than say, Michigan or Georgia residents would. This wouldn't be an issue with Belle Island since they wouldn't have a personal income tax to start with.

Puerto Ricans do pay FICA taxes IIRC but that could be nearly avoided by any Belle Islander by simply taking it all (or almost all...pay yourself minimum wage and take the other few million as non-wage income and thus pay almost no FICA taxes) as dividends, interest, or S-Corp income.

This whole thing is a moot point because it'll never get off the ground. I believe the US Congress would have to pass an Enabling Act first to let them be (or secede as) a commonwealth and given their stated plans I doubt Congress is likely to do that. The potential Belle ISlanders SHOULD have mentioned that they just wanted to buy the island and make it a commonwealth (keeping all present US laws) and only after (and IF) they succeeded (or rather, seceded) should they have changed their tax laws.

Even if they DID make the change to commonwealth staus I don't know how much good it would do them. The US government could just refuse to enforce any titles to land/buildings/property, any patents/copyrights (or other IP), any corporate limited liability/corporate personhood, and actual any property rights at all outside of Belle Island (let's say one of the erstwhile Belle Islander's owned a few thousand apartments in, say, California...the US government could just tell the tenants "go ahead and claim title as your own...this guy's property is no longer under the proetction of US law" ). I'm not saying the government would have to nationalize these people's assets, they would simply have to stop defending them (either via police, military, or in courts of law) and stop even defending any contracts a Belle Islander made and when said Belle Islander complained the government could just say "send the mighty and unstoppable armed forces of The Commonwealth of Belle Island to come defend your property....oh wait, what's that...you don't really HAVE any armed forces? Too bad" and that would be the end of almost anyone wanting to live on Belle Island.

Honestly, if you want to secede or become a semi-autonomous zone, you should at least do it somewhere where you have a fighting chance to establish an actual economy (not just a tax haven where economic activity "happens" or "is realized" for tax purposes), enough land to support yourselves agriculturally, a decent modicum of manufacturing industry and space for it, and enough population to defend yourselves (which means no elitist requirements like a minimum net worth that maybe the only the top 3% could easily meet) if push comes to shove.

[TripleB]

"send the mighty and unstoppable armed forces of The Commonwealth of Belle Island to come defend your property....oh wait, what's that...you don't really HAVE any armed forces? Too bad" and that would be the end of almost anyone wanting to live on Belle Island.

If the Island had even 1 in 3 households with "assault rifles" with a male aged 16 to 40 in reasonable physical shape and got together to train once a month, the "militia" of the island would be unbeatable in land warfare. Short of blowing the island up, no one would be able to occupy it on the ground.

And if you couldn't participate in the militia, perhaps you pay a small tax for a mercenary/defense contractor to defend as necessary.

It has to be cheaper to do it this way than to have military forces in 200 countries around the world, constantly fighting wars in places they don't belong.

[doodle]

The military of the united states in my opinion isnt so much of a cost burden, but a waste of energy and resources towards non socially beneficial ends. Why cant we just keep the military and turn their attention to doing some more useful things than scouring dirt roads in afghanistan for land mines?

[dragoncar]

This reminds me of those studies that show how private school education is cheaper and more effective than public school education. Of course what they fail to mention is that the private schools just kick out all the troublemakers and difficult kids whose issues then get offloaded onto the local public school. Doesn't prove much of anything.

If this little island were to be a legit microcosm they would need to import drug dealers, gang bangers, schizo alcoholics etc. etc.

LOL... I went to a private high school.  Plenty of rich troublemakers (and their difficult parents) there!

[doodle]

This reminds me of those studies that show how private school education is cheaper and more effective than public school education. Of course what they fail to mention is that the private schools just kick out all the troublemakers and difficult kids whose issues then get offloaded onto the local public school. Doesn't prove much of anything.

If this little island were to be a legit microcosm they would need to import drug dealers, gang bangers, schizo alcoholics etc. etc.

LOL... I went to a private high school.  Plenty of rich troublemakers (and their difficult parents) there!

Childs play compared to inner city public school. :-)