If you’re looking for an anti-Trump screed, a plaintive appeal for Middle East peace or a fulsome debate over restroom access for transgender people, turn the page.
Today’s rant is about the offensive treatment of Americans in our nation’s capital by a despotic Republican Congress.
District leaders are understandably angered by last week’s vote in the GOP-dominated House to block the city from spending locally raised tax revenue without first getting congressional approval. Calumny, not the Constitution, informs Republican behavior. Less noticed, however, is another equally offensive and more fiscally harmful action that Congress imposes on the city: Federal law allows locally raised tax revenue to be disbursed as payroll without city taxation.
It is a costly raid on the city’s coffers, and it has been going on for years.
The source of the problem is found in the commuter tax ban in the Home Rule Act. For newcomers or residents who have been living under a rock for 43 years, Congress prohibits the District from taxing the income of nonresidents who work in the District — regardless of what state they may reside in or who the employer may be.
The commuter tax ban is all the more galling because it allows direct access to the D.C. treasury, to wit: Nonresident D.C. government workers who collect locally funded D.C. government paychecks are, unlike their co-workers who live in the city, not subject to D.C. income tax.
On payday, those nonresidents leave their D.C. government jobs, taking every penny earned from the city into Maryland, Virginia or any other state where they choose to reside and happily spend their time and money.
Let’s quantify this congressional smackdown of city taxpayers with data obtained this week from the Office of the Chief Financial Officer.
Counting W-2 tax forms issued for 2015 for nonresident D.C. government workers, the results are as follows: 18,870 W-2s to employees who live in Maryland; 4,365 to Virginia residents; and 687 to residents of other states.
And what, pray tell, is the estimated amount of foregone tax revenue resulting from the ban against taxing those nonresident D.C. government workers?
From the CFO’s office for 2015 to the penny: “$98,751,983.22.”
The remedy is as obvious as the howls that will come from Maryland and Virginia congressional delegations: Allow the District to tax the income of nonresidents who work in the District.
Yes, the city is now much better managed financially than it once was, producing a steady stream of annual balanced budgets and budget surpluses. But unlike other jurisdictions, the District still has limited ability to raise revenue because 40 percent of its land is not taxable (i.e., that occupied by the federal government, nonprofits, tax-exempt institutions) and the commuter tax ban.
But if not all commuters are taxed, why the pass for nonresident D.C. government workers?
Why should city employees who live outside the District be allowed to contribute to our tax revenue problem? That’s the case when they are allowed to take dollars earned from their D.C. government employment out of the city, untaxed.
Congress should end that particular D.C. taxpayer abuse. But city leaders should also enter the fray. It’s time to take the residency requirement issue seriously.
The award of D.C. government contracts, city job appointments and competitive promotions should be subjected to strong D.C. residency preferences. Today, D.C. government jobs and city contracts provide a pathway to the black middle class . . . in suburban Maryland and Virginia. C’mon, D.C. leaders, get smart!
Without discriminating or unfairly favoring a person based on sex, race, religion or sexual orientation, every effort should be made to select D.C. residents ahead of equally qualified nonresidents.
Besides the revenue-gaining potential, there’s a benefit to having employees who live in the community. Resident city workers have something more at stake than their paychecks. They have a vested interest in making their city a more desirable place to live, raise families and educate their children.
Resident D.C. workers are more likely to shop, spend, recreate and interact with others in the community where they live.
For those nonresident workers who complain that they can’t afford to live in the District, city leaders should think seriously about creating incentives that will bring them into the city.
As for those nonresident D.C. workers who enjoy their city government offices and steady jobs, but don’t like the District’s crime rates or schools, there’s a case to be made for coming back and helping to make the community that employs them the kind of place they want to live in.
Today, they are, at bottom, essentially absentee D.C. citizens living on the city’s dime — legally enabled by Congress to be both.
Another congressional outrage, and a shame.
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