Virginia just raised taxes and Maryland politicians are trying to figure out how to raise cash. But in the District, it may be time for a tax cut.

It's been a very good year for the District, and chief financial officer Natwar M. Gandhi says it is going to get better. Last week he raised his revenue estimate for the fiscal year beginning Oct. 1 by $100 million, to $4.1 billion. In a news release, he called revenue "astonishing compared to what was originally predicted."

In 1999 the District passed broad cuts to individual income taxes, then suspended them in 2001 when revenue slumped. Based on the new revenue projection, the law is supposed to go back into effect next fiscal year, though the D.C. Council must make it happen. The city's highest marginal income tax rate would be cut to 8.5 percent from its current 9.3 percent and that rate would kick in at $40,000 of income, not the current $30,000.

The additional revenue came from all parts of the economy: Strong individual income tax collections, which rose 15.6 percent in the first five months of the year compared with a year earlier. Corporate franchise tax receipts rose 24.9 percent, suggesting strong business profits. Sales tax receipts grew 9.6 percent, indicating tourists and others spent readily at stores in the District. And deed taxes rose a staggering 61.8 percent, reflecting a booming real estate market.

-- Neil Irwin