D.C. City Council member John A. Wilson (D-Ward 2) introduced a tax amnesty bill yesterday that would permit delinquents to pay their back taxes and interest without facing civil or criminal penalties.
The proposal, also sponsored by Hilda Mason (Statehood-At Large) and H.R. Crawford (D-Ward 7), could bring the city $20 million in new revenue, according to Wilson, who is chairman of the Finance and Revenue Committee.
Several states and the federal government are considering similar tax amnesty plans as a means of generating revenue without raising taxes. Amnesty programs already have been used successfully in 18 states.
Wilson, who unveiled his bill during a meeting of his committee, said he believed the projected $20 windfall likely would trigger council debate on how to spend the additional money.
He noted there are spending needs in several areas that could be met by tax amnesty proceeds. However, if the city is forced to shoulder any new costs as a result of federal cuts under the Gramm-Rudman-Hollings law, a tax increase will be necessary, he said.
With the $20 million in amnesty funds, Wilson said, "I would like to see us do something in education and public housing . . . . And we need to add money to retire the deficit."
Mayor Marion Barry, in his fiscal 1987 budget proposal submitted Jan. 31, included no money for reduction of the city's $244.9 million accumulated general fund deficit. Congress has required in the past that the city set aside funds to cut the deficit, and council members are considering ways to add funds to reduce it in their current review of the mayor's budget proposal.
A study of tax delinquency by the Finance and Revenue Committee shows 79,439 delinquent tax accounts valued at $69.2 million. Wilson said the projected recovery of $20 million is "conservative."
The program, which would exclude real property taxes, would cover income and franchise taxes, inheritance and estate taxes, sales tax, compensating-use tax, motor vehicle fuel tax, cigarette tax, gross receipts tax, hotel occupancy tax and personal property tax.
The proposed legislation designates an amnesty period of January 1 through May 1, 1987, during which tax delinquents may come forward to pay back taxes and accrued interest. All civil and criminal penalties would be waived for persons who come forward during the period.
After the amnesty period, however, the penalties would be doubled for those who owe taxes that should have been filed before Jan. 1, 1986.