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Taxpayer's Tab Subscribers React to DC Statehood


Dan Barrett
August 21, 2013

On Friday, NTU Foundation sent out the latest edition of The Taxpayer's Tab -- a weekly update of BillTally research -- and we got quite a few replies from Tab subscribers. Below is a selection of those responses and some further detail:

"[DC Statehood] looks like another money pit that should be avoided. If Congress does anything it should be the least expensive fix." – Stephen F

If D.C. was made a full-fledged state, federal spending could technically go down. How? The District government would be given the authority to levy taxes on residents and consumers, which would go towards city operating budgets and require less federal tax dollars. This, of course, assumes that the D.C. and federal governments would react to the new tax scheme by balancing spending in a revenue-neutral way.

In regards to the "least expensive fix" to the question of D.C. statehood vs. territorial rights, there are a couple of ways to look at it. NTUF's BillTally project only tracks proposed changes in federal spending, so, if D.C. was made a regular territory, like Puerto Rico or Guam, residents would not pay the full federal income tax. This would result in lower tax revenues. On the other hand, by making D.C. a state, the federal government would spend less direct money on the city and switch to transfer payments, like Medicaid matching funds. From our analysis, we assume that making D.C. a state would ultimately lead to more spending.

"The main reason for not granting statehood to Washington, D.C. is that our seat of national government would be subject to a single state, i.e. New Columbia, instead of retaining power over a small (10 square miles), exceedingly vocal population of 750,000 who continue to demonstrate their incapability to govern their own potholes, education system, and parking maze of signs. Anyone who has worked or lived there knows firsthand." – Larry K

We alluded to a situation in 1783 where unpaid soldiers besieged Congress in Philadelphia and the city did not prevent or break up the so-called Pennsylvania Mutiny. James Madison later argued that a national government would need a federalized city to have the authority to guarantee its own safety. However, when it comes to the District maintaining local infrastructure and education, it is a complicated issue. One argument is that the District should be able to exert more local control to spend money on targeted projects/improvements, either as a state or a city government with more autonomy. Others side with the Constitution, thinking that if Congress thinks it can help run a country, it ought to be able to properly operate a city.  

"[DC Statehood] is extremely interesting from a Constitutional viewpoint and also a historical viewpoint ... BUT it would certainly bring about more Democratic Senators (2) and 2 more Democratic Congressmen. I say, let's move the capitol to northwestern Kansas (where it gets pretty chilly and snowy in the winter and subject to tornadoes in the warmer months). There is also the lingering question about Puerto Rico as well." – Red M

Looking at legislation introduced so far in the 113th Congress, I haven't seen any bill that would move the nation's capitol across the country. But a few things to consider if you’d want to do that. Rural Kansas does not have anywhere close to the infrastructure that could support all the government offices that would be required there (think Congress, the President, support personnel for them and cabinet agencies, and protection), not to mention the day-to-day private economy like food sellers, construction workers, and housing. To accomplish a move, you would have to have a massive government spending increase. One other point, by moving out to Kansas, are you anticipating any future D.C. Representative or Senator to lean Republican? If so, how do you justify such a move to those on the other side of the aisle?

"I'm opposed to them having Senators or statehood as such but I’m ok with them having a Representative based on their population." – John D

Depending on your exact intensions, John D, it still does not solve the current problem. Washington D.C. residents do not live in a state and so are not represented in Congress BUT, unless all of the U.S.'s territories and protectorates, those same residents are required to pay federal income taxes. This is where the "Taxation Without Representation" argument gains ground. So the possible solutions, at least highlighted in the latest Taxpayer's Tab, include expanding local D.C. autonomy, granting statehood or making D.C. apart of Maryland, or (as a quick technical fix) exempting D.C. residents from federal income taxes.

"I think Congress should retrocede the District back to Maryland." – Elsie G

An interesting idea, Elsie G. This would avoid granting D.C. statehood while giving local residents proper representation and taxation. However, as mentioned above, there remains the question of having Congress guarantee its own safety. If D.C. is retroceded back to Maryland, it is unclear whether or not Congress could do that. Now, there have been proposals to give all D.C. land back to Maryland except for the inner core, which Congress would still oversee. This alternative would help most residents gain representation by becoming Maryland citizens but what happens to those living right near Capitol Hill?

Thank you to everyone who replies to the Tab each week with what they think Congress should do, either in regards to a particular piece of legislation or how to resolve a challenge facing our nation.

Not in the inner circle of Tab subscribers? Go here and join in the discussion! Otherwise, if you have something you'd like for NTU Foundation researchers to know about (federal spending, budgets, & regulations), email us at ntuf@ntu.org.


 

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