Debates over tax policy can get spirited and complicated, because there isn’t a universal formula to determine who pays and how much each should pay to support the services that make our city thrive. That was clear at Tuesday’s meeting of the D.C. Tax Revision Commission. The commission, of which I am a member, was supposed to have its final meeting yesterday, but we had too much to discuss and were not able to get it all done.
The meeting revealed fundamental differences on a number of important issues, including the level of tax cutting the commission should recommend. Commission members also wanted more time to talk about potential recommendations the group will make in the area of tax administration.
The commission will schedule another meeting to finish its work, probably during the week of December 16, so stay tuned.
Monday’s meeting focused on a new proposal, or “chairman’s mark,” that is many ways similar to the one released last week. The key issues are ones DCFPI has highlighted:
- Whether to maintain DC’s top income tax rate of 8.95 percent, or to let it expire. DCFPI supports maintaining the rate, as most residents supported it when it was adopted, as a modest way to improve the progressivity of the income tax.
- How much to cut business taxes. The chairman’s mark would cut business taxes by over $100 million, more than the city’s projected surplus. DCFPI would like to see smaller cuts, especially since research presented to the commission found no negative impact of business taxes on the city’s economic growth.
- How much to cut taxes overall. The commission is considering tax cuts totaling $150 million, even after factoring in proposed tax increases. DCFPI believes the overall package should be smaller, to ensure that it can be adopted without competing with budget priorities, such as education.
The commission also sought more time to discuss recommendations for how taxes are administered. The staff compiled a long list of ideas that had been offered by experts and the public, and the commission would like to highlight some of the best before we finish our work. For example, DCFPI believes the District should adopt a process to evaluate how well our tax incentive programs work. No one in DC does that right now. Some commissioners believe DC should hire more auditors or add a layer to the property assessment appeals process. Those issues will be discussed next week, too.
So if you had been worried about what you would do with yourself when DCFPI’s “Tax Commission Tuesdays” were done, you now have a little more time to savor them. We’ll have another one next week!
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