A consequence of DC’s unique status as the federal district is our inability to raise taxes ourselves without Congressional approval.
A 2003 Government Accountability Office study found that DC loses between $470 million to $1.1 billion annually in potential tax revenue because of the federal government’s presence in DC. Not only is the city unable to collect property taxes from federal buildings and embassies, some estimates say that only 28% of the federal employees whose offices are located within the District actually live in the city, depriving government coffers of much-needed tax revenue.
DC leaders have long argued that a commuter tax could help make up lost revenue. Representative Darrell Issa, chairman of the House Committee that has legislative jurisdiction over the District of Columbia, said recently that after the election Congress should “start to think about how…how to deal with the only place that doesn’t have the ability to tax people who earn their income in that place.”
As it is, District residents’ tax dollars fund city the services that the tens of thousands of commuters who flood the city during the work week depend on. The commuter tax would attempt to alleviate this burden somewhat by taxes from workers whose jobs reside in DC, but who choose to live outside the District, either in Virgina or Maryland (and, according to the few license plates I see during the daily commute, West Virginia and Pennsylvania as well).
Naturally, such a tax is loathed by Virginia and Maryland politicians and, ostensibly, the commuters they represent whose jobs are located in the District, and enacting one would be no easy feat. Congress included a ban on the commuter tax in the 1973 Act that granted the District some degree of control over local affairs.
Moreover, the tax would have to be approved by Congress, where Maryland and Virginia have a combined 23 votes in the House and Senate. DC–whose residents are largely footing the bill for Maryland and Virginia residents to be able to work here–has zero.
DC House delegate Eleanor Holmes Norton, citing the power and influence the Maryland and Virginia Congressional delegations have in the House and Senate, described the passage of a commuter tax as a war that “[cannot] be won.”
Her realistic assessment is a departure from her fiery statement last year, when, during Congress’ move to forbid city funds from being used to fund abortions, she urged the District to tell Congress to “go straight to hell.”