Last week, Councilmember Harry Thomas floated a proposal to impose an income tax on the 70 percent of city workers who live outside the District, aiming to raise $70 million. City Administrator Neil Albert quickly wrote it off as a non-starter in Congress, but it seemed to garner significant Council support.

This Wednesday, the Greater Washington Board of Trade hand-delivered letters to each Councilmember opposing the bill. Except what the letter opposed wasn’t what Thomas had in mind: Instead, it railed against a fee on commuters similar to what London uses to control congestion. The letter reads:

Dear Councilmember,

I am writing to voice the Greater Washington Board of Trade’s strong opposition to the proposed bill “District Tax Dollars Fairness Act of 2010”. The resulting commuter tax would be protectionist, divisive, inappropriate, and very likely counterproductive.

Commuters add plenty to the District’s budget by working for corporations and businesses that pay significant taxes; by purchasing countless goods, services and meals; by paying parking taxes and/or some of the highest meter fees in the country.

Seeking to capture money from people in Maryland, Virginia, Pennsylvania, Delaware and beyond as they cross into the District will prove to be confrontational and rife with unintended consequences.

• People who come to petition their government will have to pay a fee to visit?
• Tourists who pump so much into this economy will have to pay a toll to have the privilege of viewing the monuments and experiencing Washington?
• Workers struggling to afford increasing gas prices, wage-freezes and house payments on upside-down ownership will now have to fork over $5-$7-$10 per trip into the District because the budget cannot be balanced by other means?

Greater Washington is an interdependent region – the strongest, most successful region in the United States. Our regional nature is a strength, not a weakness. The cross-regional flow adds much to the economy in the District as well as all across Greater Washington. The population growth in the District is indicative of the improvements already underway. Attract people to open businesses here, to live here and go to school here. That is where you must focus your  attention. Grow the region; grow the District.

Don’t become antagonistic to visitors, commuters, neighbors.

Things like this backfire.

I realize that you may want to go after the federal worker or even the employee who chooses to live outside the District , but don’t forget that Montgomery County and Prince Georges’ County are very capable of installing their own toll booths. And Virginians may all decide to arrive by the Memorial Bridge, controlled by the U.S. Park Service.

I strongly urge you to vote in opposition of this bill.

Sincerely,

James C. Dinegar, CAE

President & CEO

According to a Board of Trade spokeswoman, the letter was drafted when a “commuter tax” was being discussed—BOT staff may have been thinking about a previous proposal, which would have taxed all non-D.C. residents who work in the District. But even that idea would have been oriented towards taxing income at the source, rather than imposing a toll on trips across the District line, which Thomas’ spokeswoman says she’s never heard of.

The Board of Trade convened a panel this morning with Virginia House Speaker Bill Howell, Maryland Senate President Mike Miller, and D.C. Council Chairman Vince Gray, in part to discuss the “commuter tax.” BOT President Jim Dinegar told Housing Complex they had put it on the agenda to highlight what a bad idea it was.

“I just have to kill it early,” Dinegar said. “I would rather it never get to Congress.”

It was still unclear, though, what the BOT meant: Dinegar’s comments addressed a toll on entry. But the panel discussion revolved around what had really been in Thomas’ proposal—taxing income of city workers.

“So much of the earned income of the District leaves every day,” said Chairman Gray, after describing the District’s dire fiscal straits. “What I would like to see is Speaker Howell and President Miller make a commitment to the District of Columbia and say they will work with us to tax income at its source.”

Gray’s counterparts, needless to say, disagreed.

“The commuter tax is not gonna happen,” said Miller. “We don’t want it in Richmond, we don’t want it in Baltimore. It’s not gonna happen.”

It’s probable that neither idea will happen. But only one of them was ever actually on the table.