DC CITIZENS FOR TAX JUSTICE
DC CITIZENS FOR TAX JUSTICE

There is an Alternative: A Just DC Budget and Tax Plan

There is an Alternative: Just DC Budget and Tax Plan (more details below):

 

 (1) Raise the income tax rate on DC's top 5% income bracket, especially DC millionaires, and provide tax relief for low & middle income families! Our plan would give DC  at least $100 million per year in additional revenue, which should be used for the gutted programs for low-income DC residents.

(2) Cut corporate welfare, unjustified tax exemptions & abatements in the DC budget!  $350 million or more per year is potentially lost from this source. About $150 million per year is paid in rent to corporations for municipal use when publicly owned property could be used. 

(3) Get PILOTs (payments in lieu of taxes) from the World Bank, IMF, Fannie Mae! Mayor Gray & Council should mount an aggressive public campaign to get $100s of millions waiting to be collected from PILOTs.

(4) Tax lobbyists & their law firms! Example: Patton Boggs (where Council member Jack Evans gets his 2nd salary) had $332 million gross receipts in 2009.

(5) Establish a DC Public Bank! A Public Bank could leverage billions of dollars in DC taxes & fees for local green economic development, living-wage jobs, & affordable housing, instead of sending our money to Wall Street banks. For more on a DC Public Bank go to the DC Public Banking Center: http://dcpublicbanking.org/  I am proud to be on their Steering Committee.

 

Summary of Principal Objectives

 


1) Make the District’s tax structure for individuals and families fair, that is progressive, with tax rates increasing with income level for a given family size, so that the tax burden falls on those most able to bear it.

 

Note: The federal income tax structure is already progressive, but the District’s overall tax burden is regressive for most families; for incomes above $33K the tax rate steadily declines as incomes rise. District millionaires now pay a lower rate than all but the poorest families, averaging $13,600 a year (the federal poverty level in 2015 is $24,250 for a family of four (https://www.healthcare.gov/glossary/federal-poverty-level-FPL), with the self sufficiency income being more than twice this level.  A fairer tax structure will require giving needed tax relief to the low to middle income 80% of DC individuals and families while getting the best-off District residents paying their fair share of city taxes. Once the tax structure is made progressive, tax rates for all residents can be lowered once the District government is forced to stop the hemorrhaging of our revenue to big developers and other corporate interests.

 

2) Make the city’s tax system sustainable, that is insuring it can generate badly needed revenue targeted to funding essential programs, such as affordable housing and childcare, in the District budget for the next year and for the next decade.

 



3) Make the tax system and budget more transparent and accountable, by engaging in a detailed review of tax exemptions and abatements for commercial and non-profit properties. Taxpayers and elected officials must be able to evaluate the community benefits (if any) from these tax giveaways to big developers and other corporate interests.

 

The Specifics

 

1) Tax reform for DC's families

Package includes the following provisions:

a)  Base the DC income tax structure on a flat percentage of the federal income tax payment using the current federal tax structure, that is with the Bush tax cuts targeted  for the wealthy removed, thereby simplifying the payment process and increasing fairness (see Tables below for a comparison). Keep the DC Earned Income Tax Credit. [Note: this approach must be revisited if the progressivity of the federal income tax structure is reduced, e.g., under a Trump administration]

 

b) Expand the Schedule H low-income property tax credit in the DC income tax schedule to make it available to middle-income families and individuals, by:

-Raising the income limit for eligibility from $20,000 to $70,000,

-Raising the maximum credit from $750 to $3,000.

 

c) Include a built-in deduction for sales/excise taxes (the most regressive part of the tax burden, which is having the most impact on low-income residents) directly into the DC income tax form, insuring an overall progressive structure for DC residents. Sales tax revenue from non-residents such as commuters and tourists would not be reduced, since they do not pay DC income tax. 

 

Once implemented, the proposed DC Tax Structure would reduce income tax payments for most DC families and individuals.

 

d) Rather than going into the General Fund, revenue enhancements shall be targeted to underfunded essential programs in the DC Budget in consultation with Empower DC, Fair Budget Coalition, DC Jobs with Justice and other groups that truly serve the interests of the majority of our residents. 



 

The impact of this approach on tax burdens of DC residents is shown on the Homepage (4th Chart on the bottom of the page); this model was developed by Matt Gardner (Executive Director, Institute on Taxation and Economic Policy "ITEP") and David Schwartzman in December, 2009).



 

This package is estimated to increase D.C. tax revenues by at least $116 million annually.  Given the growth in the taxable income of the top 5% bracket since the initial simulation of "Steadily Progressive", the estimated revenue increase is now greater.

 

 

 



Resource Websites

 

DC Fair Budget Coalition http://www.fairbudget.org/

 

DC Fiscal Policy Institute http://www.dcfpi.org/

 

DC for Democracy http://www.dcfordemocracy.org/

 

DC Jobs with Justice http://www.dcjwj.org/

 

DC Public Banking Center http://dcpublicbanking.org/

 

DC Statehood Green Party 

http://dcstatehoodgreen.org/

 

Citizens for Tax Justice

http://ctj.org/

 

Empower DC http://empowerdc.org/

 

Institute on Taxation and Economic Policy

http://itep.org/

 

ONE DC http://www.onedconline.org/

 



 

 Email:  dschwartzman@gmail.com 

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