You cheered last week when you heard that President Barack Obama’s administration is analyzing how to reorganize Freddie Mac and Fannie Mae. The housing giants have lost a bunch of money during the recession because of bad mortgages and foreclosures.
Not unlike a large percentage of the American public, the twins are obese. Few complained, however, when they were eating everything in sight and spitting out huge payments to stockholders. The fat and happy crowd disappeared, as the economy took a nose dive and the market plunged. The duo went hat in hand last year to the government. The feds forked over your money to bail them out.
You were never one of crew eating at Freddie’s and Fannie’s table. In fact, you and your neighbors were especially dissatisfied with the special treatment the latter received. There is good reason for your discontent and annoyance.
Even when it was raking in dough, Fannie Mae hoarded its wealth, thanks, in part, to previous congressional intervention. When the District received quasi-independence, the mortgage giant was deemed untouchable. Consequently, the city has been unable to collect from it sales or income taxes.
Fannie Mae was just one of several large organizations to receive that special dispensation. Even now, as the District struggles with closing a nearly $700 million revenue shortfall, the city remains restricted from levying a fee on those companies.
Chief Financial Officer Natwar Gandhi attempted in the past to appeal to the corporation’s sense of civic duty. Fannie Mae executives slammed the door on him.
You think this is the perfect time for the White House to correct an historic wrong. House Democrats also can redeem themselves, making up for their failure to bring to the floor legislation that would have provided the District voting representation. Speaker Nancy Pelosi and her crew should remove Fannie Mae’s tax shield, requiring it to do what other commercial corporations do: Pay income taxes.
Obama and Pelosi also should order a review of all congressionally mandated tax exemptions that infringe on the District’s autonomy, preventing it, in the process, from collecting revenue important to serving the needs of its citizens. The National Geographic and the Smithsonian Institution are among those that should be required to pay up.
Gandhi told me he attempted to persuade the museum conglomerate to collect sales taxes or make a payment in lieu of taxes. But executives there treated him as if he were a thief trying to break into their offices.
The city took the World Bank to court. Now, it charges taxes on purchases made in its gift shop and cafeteria.
You don’t think the District should be made to play the bad guy to receive fair treatment. If it can’t get representation, at the very least it ought to have the right to tax companies within its borders. Equity should start with Fannie Mae.
Jonetta Rose Barras, hosts of WPFW’s “D.C. Politics with Jonetta,” can be reached at [email protected].
