Most DC households have low or moderate incomes, according to new Census data, even though DC is known as a city with substantial wealth. While the share of DC residents with high incomes is larger than in US as a whole, it still is a relatively small share of the city’s population.
Figure 1: TWO-FIFTHS OF DC HOUSEHOLDS HAVE INCOMES BELOW $50,000
DC’s median income in 2010 was $60,900. This means that half of all DC households had income below this amount and half were above. Recent research has shown that over the last decade, the District has gained a significant number of households with incomes more than $75,000 while at the same time experiencing a significant decrease in the number of households making less than $50,000. Yet despite the gain of higher-income households, more than two-fifths of all DC households had income below $50,000 in 2010.
In addition, the new Census data reveal that:
- Many DC households are very low income. Nearly a quarter of households had income less than $20,000 a year, and 43 percent were below 50,000 a year. With a quarter of DC households living close to the poverty line, it should come as no surprise that nearly one in five DC residents lived in poverty in DC in 2010.
- Only a small share of DC households are high-income. Some 10 percent of households had incomes above $200,000 in 2010.
This income distribution has implications for policy issues in DC. When Mayor Gray proposed raising income taxes on families with more than $200,000 in taxable income, some suggested that this level was too low and would impact too many households and small business owners. Yet the data show that in fact a small share of DC households ‘ less than 10 percent ‘ would have been impacted by this modest increase. The income tax increase ultimately passed by the DC Council earlier this month, on taxable income above $350,000, will impact an even smaller share of households.
