The idea of a commuter tax in the District — long coveted by D.C. leaders and loathed by those in Maryland and Virginia — may have just gained an ounce of steam on Capitol Hill.
“I think we should, after the election, start thinking about how we’re going to deal with the only place that doesn’t have the ability to tax people who earn their income in that place,” Issa said.
Issa’s mention of taxing people who work in the District but live elsewhere came in response to repeated references at the hearing by District Chief Financial Officer Natwar M. Gandhi to the fact that the city has a limited tax base, because of the presence of the federal government and so many non-profit entities, and because so many workers in the District commute to Maryland and Virginia.
The Home Rule Act of 1973 bars the District from imposing a commuter tax, though that hasn’t stopped city officials from looking for ways to implement one. In 2005, a federal appeals court — led at the time by Judge John G. Roberts Jr — reaffirmed that D.C. could not impose such a tax without congressional approval after local activists and leaders filed suit seeking to overturn the ban
After Thursday’s hearing, Issa said he thought it was a bad idea to give workers an incentive to commute to save money on their taxes. He did not actually endorse the idea of a commuter tax — he could instead propose that the District lower its taxes to be more competitive with the neighboring jurisdictions. But he did make clear he thought the current system deserved some scrutiny.
“We at least need to consider how it impacts the city in a hearing,” Issa said.
Any effort to impose a commuter tax would meet stiff resistance from the Maryland and Virginia governments. Referring to the possibility of changing District building heights, Issa told reporters after the hearing, “The Height Act did not come down on tablets.”
Norton added: “But the commuter tax did. And those tablets came from Maryland and Virginia.”