Detroit failed because of those policies that drove the tax base away. Yes, that is entirely the city's fault. No one has any moral obligation whatsoever to live in any given place. Quite the reverse: it's the city leadership's job to make the city inviting. But Detroit chose a different path.
Tax laws are a big part of what makes both people and businesses want to come or go, balanced by the degree to which those tax dollars actually make the city a better place (the absence of corruption). A city seeking prosperity needs to remember that. You can tax all the things, and give all the money to your friends - but not forever.