High-income families in Washington continue to pay more in local taxes than those elsewhere in the metropolitan area while poorer D.C. families generally pay less than their suburban counterparts, according to new studies that call the city's tax structure one of the most progressive in the nation.
The studies, conducted by the D.C. Department of Finance and Revenue, showed the same pattern when the Washington local tax burden was compared with that of 29 other major U.S. cities: Relatively low taxes for low-income residents, relatively high taxes for the more affluent.
"The studies . . . show that the District currently has the most progressive tax system of the 30 largest cities," the city said in releasing the data. The city conducts such studies annually, and this year's results confirm established trends.
The new studies show, for example, that a family of four in Washington earning $50,000 a year would pay 11.60 percent of its annual income in local taxes, or $5,801, compared with $5,285 in Alexandria, the second highest jurisdiction in the area, and $5,121 in Prince George's.
The smallest tax burdens in the metropolitan area for a family earning $50,000 are in three Virginia jurisdictions, according to the studies: Fairfax City ($4,172), Fairfax County ($4,283) and Loudoun County ($4,283).
A family of four in Washington earning just $10,000, on the other hand, would pay 8.41 percent of its income, or $841, annually in local taxes--less than in all but four of the 11 area jurisdictions that were compared in the study.
A family of four in Alexandria earning $10,000 would pay $1,070, the highest burden for that income group. Fairfax City has the lowest tax burden for a family at that income level, $809.
The finance department's tax studies examine the total burden of income, sales, property and automobile taxes for a hypothetical family of four. The family is presumed to include only one wage earner, own its own home and live in the jurisdiction where the wage earner works. Relatively few taxpayers in the area actually fit that description, but city officials say the overall conclusions of the tax studies are valid for most taxpayers.
The tax studies show that at a family income level of $25,000, Washington residents pay the highest local income taxes in the area ($1,275) while residents of the suburban Virginia jurisdictions pay the lowest ($841). They show that at that same income level, residents of Alexandria pay the highest real estate taxes ($1,226) while Loudoun County residents lay the lowest ($696).
Virginia residents pay the most in automobile taxes and user fees because of that state's personal property tax on motor vehicles and its 13-cents-a-gallon tax on gasoline. For a family earning $50,000, the annual cost in taxes of owning and operating a three-year-old, eight-cylinder Ford LTD station wagon that consumes 400 gallons of gasoline a year is $646 in Arlington, $628 in Alexandria, $273 in the District and only $157 in the three Maryland counties.
The tax burdens on the theoretical family of four vary widely among the nation's major cities.
For example, a family with a gross income of $50,000 pays 16.4 percent of its income in local taxes in New York City, the highest-ranking city; 16 percent in Boston, the second highest; 2.8 percent in last-place New Orleans and 9.8 percent in Washington, which ranks sixth in that income category.
At the $10,000 income level, the family of four would pay the most in local taxes in Boston ($1,521) and the least in Jacksonville ($174). Washington ranks 15th in that category, with the family paying an average $621.
In general, residents of Sunbelt cities in the South and West pay far less in total local taxes than those in the industrial cities of the North and Northeast.