Two D.C. Council members are planning to reintroduce legislation that would raise taxes on the District’s wealthiest residents, hoping this time they’ll gain traction as the city faces a $175 million budget gap.
Both Ward 1 Councilman Jim Graham and at-large Councilman Michael A. Brown have repeatedly tried and failed to get the council to back their separate measures that would increase the tax rate for city residents in the highest income brackets.
But this time “we have a $175 million reported gap, while this will on fill part of it, we need to find every dollar we can,” Graham told The Washington Examiner.
“Clearly everything has to be on the table,” Brown said.
Graham plans to roll out nearly the same legislation that failed to win the council’s support last spring. The highest income tax rate in the District is 8.5 percent on residents whose annual income is $40,000 or more. Graham said his legislation would increase the rate to 8.9 percent for people whose taxable income is $1 million each year. He said it will increase revenue by about $17 million in the first fiscal year.
Graham’s bill was defeated in a 7-5 vote in May, with members like Council Chairman Vince Gray, voting against it. Last week, Gray, the presumptive next mayor, said he’s not thinking about revenue increases yet.
Brown’s version of the income tax increase last spring would have created two tiers, taxing residents who annually earn $250,000 or more at 8.9 percent, and those who earn $1 million or more at 9.4 percent. He said he’s not yet ready to commit to specifics as he examines actions taken by other jurisdictions and meets with stakeholders to determine an appropriate rate.
Both councilmen said they’d work together on the legislation, but they’re likely to bump into conflict: Brown says he’s willing to put an end date on his tax rate increase, something Graham strongly opposes.
They’ll also face stiff opposition from Ward 2 Councilman Jack Evans. Any revenue legislation introduced directly to the council typically passes through the finance and revenue committee, which Evans heads.
“It’s a shortsighted approach,” Evans said. “If it’s assigned to my committee, I won’t move it forward.”
But Graham said he plans to introduce his measure as an amendment to the supplemental budget bill the council will develop to fill the budget gap, sending it straight to the entire council.
Brown declined to get specific, but said “there are other ways to get this done without going through the traditional route.”
