Dear Council Member:
On behalf of the National Taxpayers Union's members in the District of Columbia, I urge you to reject any proposal to increase the income tax or levy new taxes as part of the city's next budget. Such tax hikes would further burden D.C.'s residents as they weather this recession.
In facing a $550 million budget deficit, the City Council should avoid the tired prescription of higher taxes. Instead, District policymakers must recognize that years of increasing spending cannot be maintained, and that targeted budget cuts are necessary to restore government to its proper, sustainable size. Closing the shortfall by paring back wasteful spending would still leave the District with total expenditures roughly as large as they were in 2008. Most District residents would agree that the city was not in an unlivable condition two years ago, especially considering that the unemployment rate that year was actually a full six percentage points lower than it is today.
But rather than finding savings, some propose raising the tax rate on higher-income residents from 8.5 to 8.9 percent. An income tax increase would give tax-paying residents incentive to leave the District for lower-tax jurisdictions such as Virginia, taking their tax dollars with them. Other proposals would impose additional taxes on soda, liquor, theater tickets, gym memberships, and more. As costs on goods and services rise, people will buy less, which means less revenue. These taxes will burden hard-working families, professionals, and students, many of whom would be saddled with several new costs simultaneously. Since lower-income families tend to consume soda more, the tax increase aimed at this product will hit the poor hardest. Also, it will hurt convenience stores and other small businesses, as beverages comprise a substantial portion of their sales.
Just as hard-working families have tightened their belts, the City Council should confront the tough decisions on spending. The time has come to stop piling more taxes on residents, making job losses worse, and attempting to delay the inevitable necessary reforms to an unsustainable government. Therefore, I urge you to reject any tax increase as part of the budget.
Sincerely,
John Stephenson
State Government Affairs Manager