Our Fiscal Year 2026 Policy Priorities
Raise the tax rate on capital gains: Capital gains—profit from selling assets like stocks—overwhelmingly flow to the top 1 percent.
Make business taxes fair: Restructure DC’s business taxes by enacting a Business Activity Tax so that corporations operating in the District and benefitting from our economy and services, but currently not paying taxes to DC, contribute to our shared resources.
Help low and moderate income households make ends meet:
Expand the local child tax credit we won last year to at least $1,000 per child, to go to all children under the age of 18, including those whose parents use an ITIN for taxes. This will help end child poverty in the District, especially among Black children and children in families with an undocumented parent, who are the vast majority of children living in poverty in DC.
Expand and automate 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.
Implement a Land Value Tax for funding WMATA: WMATA does not have a dedicated revenue source, so transportation for DC residents is constantly under threat. The District should enact a land value (or split-rate) tax on areas within a mile of MetroRail stations to give Metro the resources it needs and channel transit-created land values back into the system that made them in the first place while encouraging transit-oriented development.
Mansion tax: Deepen the progressivity and rates on the highest value homes, to win greater revenue than Chairman Mendelson’s very limited version, passed last spring.
Millionaires tax: Raise tax rates on income above $500,000, and especially rates for incomes over $1 million.
Looking for more details? Read our full tax policy proposal below.
Increase Capital Gains Tax
This proposal would raise the income tax on capital gains income by 1 percentage point for taxpayers with an AGI over $500,000 and for capital gains income at or above that level only, meaning capital gains below the threshold would still benefit from the lower marginal tax rates in current law. Similarly, the proposal would raise the income tax on capital gains income by 2 percentage points for taxpayers with an AGI between $750,000 and $1 million, and by 3 percentage points for taxpayers with an AGI over $1 million. Just under 2 percent of taxpayers would be affected by these surcharges.
Revenue Prospect: $123 million
Tax the Transfer of Capital Gains Income
If a DC resident leaves an appreciated asset to an heir upon death, neither they nor the heir will ever owe capital gains tax on the growth in value up to that point. DC should eliminate this tax loophole, called the “stepped-up basis,” which encourages wealthy people to turn as much of their income as possible into untaxed assets that will generate capital gains and then hold onto those assets until death.
Revenue Prospect: $44 million
Tax High-Value Homes
DC can continue to strengthen the progressivity of the residential property tax structure by creating additional brackets and marginal rates for the top 5 percent of homes (those with taxable value above about $1.5 million in 2024).
For example:
Homes valued under $1.5M: keep current rate of $0.85 per $100 of assessed taxable value
Homes $1.5M-$1.99M: $1 per $100
Homes $2-$5M: $1.50 per $100
Homes over $5M: $2 per $100
A version of this proposal was under consideration by the Tax Revision Commission in its initial and later modified package of recommendations. It would impact only 5% of homeowners and would exclude homes receiving deductions or credits for seniors, veterans, and those living with a disability or on low income.
Revenue Prospect: Depending on progressive marginal rates ~$35 million
Implement a Land Value Tax for funding WMATA
Transit is the lifeblood of how DC moves. However, because WMATA does not have a dedicated revenue source, transportation for DC residents is under cyclical threat. To finally give Metro the resources it needs, the District should enact a land value (or split-rate) tax on areas within a mile of MetroRail stations. This would also have the added benefit of channeling transit-created land values back into the system that made them in the first place while encouraging transit-oriented development.
Revenue Prospect: $505.1 million
Raise Tax Rates on Income Above $500,000
DC can ask for more from the richest, predominantly white, households by increasing marginal rates on top earners and adding at least one new income bracket for incomes above $3 million.
For example:
For incomes $500,000-$1 million, increase the rate by .25% to 10%
For incomes $1-$3 million, increase the rate by .75% to at least 11.5%
For incomes above $3 million, increase the rate by 1.75% to at least 12.5%
Revenue Prospect: $109 million
Enact a Business Activity Tax
A business activity tax (BAT) is a tax on economic activity of a business rather than profits of its owners and would help ensure all DC businesses pay their fair share. The District should enact a BAT of 2%, exempting from taxation the first $200,000 in economic activity to benefit small businesses. BAT revenue can fill in the gaps of declining revenue sources, reduce or replace the sales tax increase, and/or buy down the increased payroll tax rate for businesses.
Revenue Prospect: $505.8 million
Expand the Local Child Tax Credit
Expand DC’s new local Child Tax Credit (CTC) to maximize poverty reduction for children, especially as more than one in three Black children live in a family below the official federal poverty line. The credit should be expanded to all children (not limited to young children) as poverty among older children is higher than for young children. The cap on number of children eligible per family should be removed. And the credit should be expanded to $1,500 at minimum per child for the lowest income families. DCFPI found that a DC CTC set at $1,500 per child would reduce child poverty by 18%. The District can also put more money in the pockets of families with the lowest incomes by lowering and/or graduating CTC eligibility income caps.
Prospective Investment: ~$80 million
Automate and Expand Schedule H Deduction Filing on Property Tax
To help more low and moderate income families and seniors stay in their homes, DC should expand income eligibility for the DC circuit breaker program (Schedule H) to $87,000 for renters and $100,000 for homeowners, regardless of age, and increase the maximum credit of $2,500 for homeowners and $1,500 for renters. DC should also automate , which would cut child poverty in DC by 18%.Schedule H for homeowners so it is administered as part of the property tax. Renters would still claim the credit on their income tax forms.
Prospective Investment: ~$20 million, recurring; $9 million one-time to automate.