Our Letter to DC Council Regarding the Tax Revision Commission
October 28, 2024
Chairman Phil Mendelson
Councilmember Kenyan R. McDuffie
Councilmember Anita Bonds
Councilmember Robert C. White, Jr.
Councilmember Christina Henderson
Councilmember Brianne K. Nadeau
Councilmember Brooke Pinto
Councilmember Matthew Frumin
Councilmember Janeese Lewis George
Councilmember Zachary Parker
Councilmember Charles Allen
Councilmember Vincent C. Gray
Councilmember Trayon White, Sr.
1350 Pennsylvania Avenue, NW
Washington, D.C. 20004
Dear Chairman Mendelson and Councilmembers,
Two years ago, Mayor Bowser and DC Council convened the Tax Revision Commission to develop a set of policy recommendations that create a broader, more resilient tax base, advance progressivity and racial equity, improve efficiency and competitiveness, and help ensure simple, open, and fair tax administration. But more than a year past their deadline, the commission has failed to deliver. DC is facing big budget pressures as revenue growth slows, raising questions about how to fund affordable housing, public transportation, and other commitments to residents. Ultimately, it is up to DC Councilmembers to make thoughtful changes to the tax code. Rather than lose more time, Council should move forward with the proposals in the commission’s July 2024 draft recommendations to raise additional resources and make DC’s tax system more progressive.
For the past two years, the commission has heard presentations from experts, received research across a range of topics, and got feedback from many sectors and stakeholders on their draft recommendations in order to reach a compromise. Unfortunately, that work has been undermined by a handful of members who refuse to follow where the evidence leads. Instead, those individuals are insisting that the commission delay further until new “evidence” is produced supporting their preferred policies (or those preferred by their clients’ and associates’ bottom lines). Their delays have already forced the Council to work through two budget cycles without the benefit of a report. District residents deserve better.
Even if certain members succeed in preventing the commission from offering a final package of recommendations rooted in economic research and expertise, the Council can still salvage the work of the last two years. In July, the Commission released draft recommendations that included a number of proposals that would broaden the District’s tax base, distribute the responsibility of paying taxes equitably, and provide the revenue necessary to build and maintain a thriving, modern economy. They include:
Restructuring DC’s business taxes and establishing a Business Activity Tax so that corporations that operate in the District but don’t currently pay taxes to DC contribute to our shared resources.
Increasing taxes on high-value homes, such as homes valued at over $1.5 million, which would impact tax bills for only 5 percent of homeowners while making the residential property tax more progressive.
Expanding and automating the property tax credit known as Schedule H for low- and moderate-income homeowners and renters so they can better afford to stay in DC.
Increasing the DC child tax credit to at least $1,000 per child to help end child poverty in the District, especially among Black children.
Rather than waiting on a commission that has been captured by narrow interests, Councilmembers should incorporate these recommendations for the fiscal year 2026 budget. DC voters overwhelmingly support investments in programs and services that support residents experiencing economic hardship and increasing taxes on businesses and households with the most wealth to pay for them.
The past few years have demonstrated what the District can accomplish when we invest in residents’ well-being. But if lawmakers fail to ensure revenue and spending keep up with growth in the economy, DC will struggle to adequately fund DC programs and services. It’s time for DC Council to get serious about raising the revenue needed to meet community needs and disrupt longstanding racial and economic inequity.
Sincerely,
The All in for DC campaign
All in for DC: A Tax System for Justice is a campaign under Just Recovery DC aimed at raising revenue the District can invest in programs and services that advance racial equity.