Harry “Tommy” Thomas Jr. has an accounting problem. I’m not referring to the Ward 5 council member’s $300,000 problem, in which he’s accused of diverting that sum from city youth programs to his personal account. We shall let federal prosecutors sort out whether Thomas knowingly, and possibly criminally, misused public funds.
Thomas’ accounting problem in this case has to do with taxes. When he joined six council members last week to increase the tax rate for D.C. residents who make more than $350,000, he said the new rate would add “only $740” a year to the tax bill of someone who earns $500,000 a year.
Wrong. Wrong by more than $1,000.
According to the Office of Chief Financial Officer’s Tax and Revenue branch, an individual making $500,000 paid $41,300 in D.C. taxes at the current 8.5 percent rate. Under the new 8.95 rate, the tax rises to $43,370.
Let’s do the math, Tommy: The increase is $2,070, rather than $740. So the council member was off $1,330. Taxpayers who earn $1 million a year would have to fork over an additional $4,320 a year, according to the tax office. And heavy hitters who pull down $2 million would add an extra $8,820.
The argument to raise rates for the city’s wealthy crowd harkens back to the 1960s anthem: Soak the rich! In the nation’s capital, the soaking is harsh, stark and — might I add — extremely out of whack. No one likes to put the accounting into race and class terms — certainly not the city council — but allow me: About 95 percent of the city’s personal income tax revenues come from white residents who live west of Rock Creek Park. And the majority of those residents don’t use the city services they finance.
Add it up: The tax system in D.C. is a transfer of wealth in the most naked form.
Interestingly, I checked with a few of my friends who make more than $350,000 and would have to pay for the council’s new accounting. OK, none of my friends fits that category, but I know people who know people. By and large, they seem unfazed. Some fret over every dime, but most of D.C.’s rich are of the liberal persuasion and don’t mind sharing, even in four figures.
That doesn’t mean politicians should take advantage of their generosity. I’m with Jack Evans and Marion Barry, who voted against the tax hike. Soaking the rich rather than making ends meet is a lazy, lousy solution to paying for the government.
“If you were giving it to charity, that would be one thing,” says Bill Regardie, my friend and former magazine publisher, who might see his tax bill rise. “If I had the choice of writing a check to So Others Might Eat or D.C., that would be an easy one. Why not give us the option to direct our taxes?”
Indeed, why not?
Harry Jaffe’s column appears on Tuesday and Friday. He can be contacted at [email protected].
