Bad Local Tax Policy Didn't Drive Detroit's Collapse

In 1949, Detroit was the most most prosperous city in the United States, and was near the top globally. Detroit has fallen far indeed from that point. 

There has been inflation since 1949 with $100 in 1949 worth $1,264.03 in 2024. In 2024 dollars, the median household income in 1949 in Detroit was $45,846.37.

The median household income in the U.S. is currently $75,149. It was about $3,100 in 1949 which is about $39,184.93 in 2024 dollars, which is up 91.7% in inflation adjusted terms. 

Detroit's median household income is $34,762, which is about 46% of the U.S. average, and is down 24.2% in inflation adjusted terms from what it was in 1949. Detroit's median household income as a percentage of the U.S. median household income has fallen 60.5% since 1949.

Detroit's population in 1950 was 1,203,368. Detroit's population has fallen steadily since then to 620,376 in 2022 (at 48.4% decline). The U.S. population in 1950 was 151.3 million. In 2022, the U.S. population was 333.3 million (a 220% increase). Detroit's share of the total U.S. population has fallen by 76.5%.

Detroit's aggregate city income is down 60.9% from 1949 after adjusting for inflation.

Between 1970 and 2000, 161,000 buildings were demolished. [As of 2010, there were] estimated to be 40 square miles of vacant property, with 33,500 empty houses and 91,000 vacant lots.

From here (citing a dead link to a newspaper website). 

I wrote the statement below, in response to a discussion of the role played by Detroit's local tax policies in its economic development, and the potential these have going forward for the city.

There is basically no reasonable interpretation of economic history in which Detroit's decline from 1949 to the present is a function of Detroit's local government tax policies. Detroit's economy collapsed because the U.S. manufacturing industry collapsed, and it fell the hardest and longest of all of the rust belt cities because its single minded focus on manufacturing is the very factor that made it so prosperous in 1949. 

Detroit was a victim of offshoring, declining demand for manufactured good exports as other economies rebuilt their own manufacturing bases in the post-WWII era, and automation that reduced the number of jobs necessary to meet U.S. demand for manufactured goods. International trade policy played a big role and so did indifference to the local economic consequences of a transition to a post-industrial economy. These effects are so great that even now, when Detroit's manufacturing sector is a mere shadow of its former self, this effect still swamps any effects attributable to local government tax policies. 

Detroit's most pressing issues are how to come to terms with a sustainable acceptance of its much smaller size in the post-industrial era, and how to diversify its economy. Policies to encourage positive growth are chasing the wrong dream. It should instead figure out how to be a stable, economically diversified small city.