District residents have long been accustomed to lugging around the heaviest tax burden in the Washington region, paying considerably more in combined local income, real estate and sales taxes than their suburban neighbors.
But maybe it's a comfort to see that the District's tax levies are not out of line with other major cities.
A new study issued by Valerie Holt, the D.C. chief financial officer, makes that point.
It calculates that a District family of four with $50,000 in annual income would have paid a total of $4,650 in the major local tax categories last year, placing the capital 14th from the top in a comparison of state and local tax burdens in 51 leading U.S. cities.
Moreover, the District is not far above the $4,274 average for all the cities in the study.
Prepared by deputy chief financial officer Natwar M. Gandhi and D.C. chief economist Julia Friedman, the study compares taxes on income, residential property and automobiles (including gasoline and personal property taxes), and sales and use taxes. Federal taxes are not included.
For families with $50,000 in income, the 10 cities with the biggest tax bites are, in order, Bridgeport, Conn.; Newark; Philadelphia; Portland, Maine; New York; Milwaukee; Baltimore; Chicago; Louisville; and Manchester, N.H. The study includes the District and the largest city in each state.
The study also shows the District's stiffer treatment of wealthier residents. For a family of four with $100,000 in annual income, the District ranked 10th from the top, with a total tax levy of $10,937.
Tax rates in the District are headed down after the approval in May of a package of personal and business reductions that will total nearly $300 million when fully phased in. Income tax rates would be trimmed by 30 percent, beginning in 2001, to make the city more competitive with suburban jurisdictions.
But these moves may not change the District's position on the tax burden list much, because tax rates are being cut everywhere, Friedman said.
The bad news for the District appears in the study's detail, which shows the District is heavily dependent on its income taxes, collecting $2,709 from a family of four with $50,000 in income, or 58 percent of all the local taxes counted in the study.
Counting income taxes only, the District placed sixth on the list, behind only Louisville, Philadelphia, Detroit, New York and Portland, Maine.
Because of a restrictive court decision, the District has a very limited capability to collect business taxes on legal and accounting firms -- a steadily growing source of jobs. And it doesn't collect income taxes on the commuters who make up two-thirds of the District's work force.
"We can't capture the part of the overall tax space that has the greatest potential for growth, overall," Friedman said. "That's a very grave, long-term concern for the District."
Death and . . .
Below, estimated burden of major taxes, excluding auto tax, for a family of four in 1998 with $50,000 in adjusted gross income:
Income tax $530
Property tax $8,417
Income tax $3,067
Property tax $2,205
New York City
Income tax $2,934
Property tax $1,648
Income tax $2,492
Property tax $1,997
Income tax $1,205
Property tax $2,773
Income tax $3,190
Property tax $912
Income tax $3,007
Property tax $1,097
Income tax $2,613
Property tax $1,366
Income tax $2,087
Property tax $1,992
Income tax $2,709
Property tax $879
SOURCE: D.C. chief financial officer