District residents pay less in taxes on average than nearby suburban populations of both Maryland and Virginia, a new study finds, leading the report’s developers to conclude no new tax breaks are necessary for city dwellers.
The study, researched by the D.C. Fiscal Policy Institute, undercuts the perception that D.C. residents pay the highest taxes in the region, said Ed Lazere, the institute’s executive director.
Quite the contrary, he said: The District offers the lowest property tax rate at 92 cents per $100 of assessed value — soon to be 88 cents — as well as a homestead deduction that further reduces real estate tax bills, a falling income tax rate and no tax on automobiles.
“For D.C., no further tax cuts are needed for the purposes of keeping us competitive in the region,” Lazere said. “I don’t see that providing tax cuts for tax cuts sake makes sense.”
But Ward 2 D.C. Council Member Jack Evans, chairman of the Finance and Revenue Committee, was quick to dispute the findings, arguing Lazere ignored the city’s 5.75 percent sales tax, corporate income tax, unincorporated business tax and parking taxes, among other local levies.
“When you start putting all these other elements into the formula, there’s no way you can come to the conclusion that our tax structure is less than Maryland or even competitive,” Evans said.
The average District family of four earning $100,000 a year pays $4,619 annually in taxes, the study found, as compared to $6,117 for a household in Montgomery County, $6,509 for Prince George’s, $5,883 for Fairfax and $5,693 for Arlington.
Continuing tax cuts is a “misguided policy when there are other things that money could be used for,” Lazere said. Council Member Phil Mendelson disagreed, at least on the issue of continued property tax relief, which he called “critical.”
