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As citizens prepare to file their taxes by this year’s April 18 deadline, a new analysis finds that between local and state charges, District families owe the least in taxes in the region.
D.C.’s Office of Revenue Analysis used data from the U.S. Census Bureau, the Internal Revenue Service, and other government sources to compare the property, income, sales, and auto tax burdens on dual-income families with one child living in D.C. and surrounding jurisdictions. Such families making $100,000 a year, for example, pay a combined tax burden of 8.1 percent in D.C., nine percent in Arlington, and 9.6 percent in Prince George’s County; those making $75,000 pay a combined tax burden of 7.4, 8.8, and 8.7 percent in those places, respectively.
According to D.C. fiscal analyst Lori Metcalf, “the regional average combined tax burden is 15.1 percent for the lowest income family,” making $25,000 a year, “and 9.6 percent for the highest,” making $150,000 a year.
“Assessing how the other areas rank depends on the specific income level,” she continues. “At the lowest income level of $25,000 [per] year, the Virginia jurisdictions levy the highest combined tax burdens, with Alexandria… ranking first overall, and levying a tax burden of $4,130, or 16.5 percent of the family’s income. At the highest income level, Falls Church… levies the highest overall tax burden, at $15,625 or 10.4 percent of income.” You can plug in income levels and tax types here:
Notably, the analysis shows that the income tax burden for families making $25,000 a year in D.C., Prince George’s County, and Montgomery County is negative: Such families are reimbursed several hundred dollars each year through earned income tax credits, while their peers in Virginia’s jurisdictions owe nothing. The District’s property taxes “fall below the area-wide averages at all income levels, except at the $25,000 income level,” as depicted below:
ORA published a more comprehensive report on regional tax rates and burdens in December, which you can read here.
Screenshots and map via OTR