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D.C. Has the Tax Base to Provide Relief for Working and Poor People, Restored Services, Education, and a Public Hospital.

THE D.C. STATEHOOD GREEN PARTY

Thursday, August 28, 2003

Contact: Scott McLarty, Media Coordinator 202-518-5624, scottmclarty@yahoo.com 

Calling D.C.'s regressive tax structure a scandal, the D.C. Statehood Green Party promotes the 'Fair Taxes for D.C. Plan' and recommends steps for reform.

WASHINGTON, D.C. -- Members of the D.C. Statehood Green Party insisted that, while federal help is long overdue, the District itself has the tax base to provide for many of the basic needs of residents, including health care, housing, and education.

"We've been misled by politicians who tell us the District just doesn't have the tax base to meet these basic needs of our residents," said David Schwartzman, who chairs the party's Budget and Finance Committee. "D.C. has the tax base to begin to fund these essential needs much better than it is doing now. Federal inaction is no excuse for inaction by our local elected officials in D.C. In particular, we can increase the 2004 budget with the necessary supplement to D.H.S. [Department of Human Services] to maintain the current income eligiblity for the Child Care Subsidy Program. We join the Fair Budget Coalition in opposing D.H.S.'s proposal to reduce income eligibility for this program."

Statehood Greens have long asserted that the District government, if it has the political will, can adequately fund Interim Disability Assistance, affordable housing, education, and other human needs. (D.C. General Hospital was dismantled and its services privatized two years ago by Mayor Anthony Williams in collusion with the Congressionally appointed Financial Control Board, leading to a severe health crisis in D.C.)

Schwartzman compared how D.C.'s wealthiest pay a smaller percentage of their income in local taxes than do low and middle income residents, especially since the wealthy can take advantage of the federal deduction offset:

  • The taxable income of D.C. residents making $100,000 and above is at least $6.5 billion -- 3% of which is $200 million (I.R.S. statistics for latest figures available, 2001). The taxable income of D.C. millionaires alone (782 in 2001) is at least $2 billion.

  • Low and middle income D.C. families pay 8.4 to 11.1% of their income in local taxes, while the top 1% (average income of $2.06 million) pay only 5.8% (Institute on Taxation and Economic Policy report, January, 2003).

The D.C. Statehood Green Party has urged several steps that would generate the revenue necessary to provide relief for D.C.'s middle and low income residents, while generating the necessary revenue to cover essential needs such as health care, education, and housing assistance:

  • Repeal the Tax Parity Act of 1999 that favors wealthy individuals and corporations.

  • Lower the sales tax rate on essentials -- a regressive tax that disproportionately affects working and poor D.C. residents.

  • Calculate the D.C. income tax as a percentage of the federal income tax payment, making it more progressive.

These three recommendations are the basis of the 'Fair Taxes for D.C. Plan' endorsed by the D.C. Statehood Green Party, Center for Community Change, D.C. Alliance for Democracy, D.C. Coalition for Housing Justice, D.C. Social Welfare Action Alliance, Gray Panthers of Metropolitan Washington, and other  District organizations and citizens.

"Our District government failed to tap our real tax base, the booming incomes of wealthy taxpayers during the 1990s," said party member Michele Tingling-Clemmons. "The result is a regressive local tax structure that fails to meet the essential needs of our residents. New figures from the 2000 census reveal a sharp spike in income inequality and poverty in D.C. since 1990 -- greater than in any state. Families in poverty poverty grew from 13% to 17%, while poverty among children younger than 18 grew from 25% to 31% according to The Washington Post [June 6, 2002]. In the same decade, the taxable income of wealthy individuals grew from $2 billion to $7.25 billion, according to the I.R.S. That's a scandal."

"Opponents of tax reform insist that D.C.'s wealthiest will flee if we make them pay their fair share, but there's no reason to believe this," added Schwartzman. "The wealthy have been steadily moving into D.C. throughout the last decade, despite slightly lower local tax burdens in suburban Maryland and especially Virginia. Even this difference has been erased by recent tax hikes in the suburbs."

Schwartzman notes that D.C. taxpayers in brackets greater than $100,000 increased from 12,000 to 30,000 in a decade, according to the I.R.S. "Very few wealthy DC residents are likely to leave D.C. if we require them to pay slightly higher rates, given the advantages of living here, such as lower commuting costs and time, cultural opportunities, etc. Reducing the income gap and 'misery index' here would benefit the wealthy as well as everyone else, by reducing crime, reducing class and racial polarization, and improving the quality of life for all, whatever their income or neighborhood."

So why haven't reform proposals like the 'Fair Taxes for D.C. Plan' been enacted?

"Ask our elected Democrats and Republicans in city hall," says T.E. Smith, a member of the D.C. Statehood Green Party. "And let's start electing Statehood Greens to City Council and other public offices."

MORE INFORMATION

The D.C. Statehood Green Party http://www.dcstatehoodgreen.org 
1314 18th Street, NW, lower level, Washington, DC 20036, 202-296-1301

'Fair Taxes for DC (Where's the Money?)'
http://dcstatehoodgreen.org/testimony/2001/ftx1001.htm 

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