The impact and inequity of the Tax Parity Act of 1999 are more serious than indicated in Jonetta Rose Barras’ column (Loose Lips, 4/13). Tax parity is a revival of the discredited Reaganomics, similar to the Bush tax-cut plan. According to the latest projections from the chief financial officer, the District will lose about $150 million in revenue this fiscal year, $200 million in fiscal year 2002, and, by the time of full implementation in fiscal year 2004, a cumulative total of nearly $1 billion. About 70 percent to 80 percent of this tax cut will go to wealthy individuals and businesses. As accurately criticized by D.C. Councilmember Adrian Fenty, the tax cut for individuals is a flat percentage of income, not progressive, with about 60 percent of the benefit going to the $89,000-and-above income bracket when fully implemented (Institute on Taxation and Economic Policy study). The business part includes lowering the property-tax rates, but homeowners are excluded.
By a progressive restructuring of our local taxes, we in the District can afford to give tax relief to low- and middle-income residents and also generate the necessary revenue to meet essential needs, which are still being seriously shortchanged in Mayor Anthony A. Williams’ proposed budget for fiscal year 2002. We require funds to fix our schools; provide affordable housing; restore and expand the gutted safety net for our children, the poor, the disabled, and the elderly; and especially provide a full-service D.C. General Hospital and integrated health network. We have been misinformed when our politicians and control board have told us that the District just doesn’t have the tax base to meet these basic needs of our residents. The projected taxable income this year is more than $7 billion for residents making $100,000 and above per year (IRS statistics). The wealthy continue to pay a smaller percentage of their income in local taxes than do people in low- and middle-income brackets, especially because of the federal deduction offset of state income and property taxes utilized by the upper-income brackets. A modest increase in the D.C. income tax rate on the wealthiest bracket would be an effective federal payment to the District by reducing their federal tax payment, and the wealthy would still have a lower overall tax burden than now because of an impending federal tax cut. Progressive tax restructuring will reduce the income gap and “misery index” in the District, with benefit to the wealthy as well as everyone else, by reducing class and racial polarization, and improving the quality of life of all, whatever their income or neighborhood.
While both the mayor and the D.C. Council are supporting raising the D.C. earned-income tax credit to 25 percent of the federal credita step we strongly endorsethey should implement the whole “Fair Taxes for D.C.” plan, which includes repealing the Tax Parity Act of 1999, lowering the regressive sales-tax rate on essentials, and basing our income taxes on the more progressive federal structurethereby giving real tax relief to the $50,000-and-under bracket. Organizational endorsers include the D.C. Coalition for Housing Justice, the Center for Community Change, the D.C. Statehood Green Party, the Gray Panthers of Metropolitan Washington, and Stand for Our Neighbors. Many community activists and local trade unionists have supported this plan. Elements of this plan have been proposed in the past by councilmembers but have died in committee. Now is the time for the council to act, before the full implementation of the Tax Parity Act.
Campaign for Fair Taxes for D.C.