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.” Continue reading