December 2, 2005
A Flat Tax for the District?
As they say: nothing is sure in life but death and taxes. And in the District, those taxes are high. That may change, though.
According to an article published in the New York Sun today, Senator Sam Brownback (R-Kan.), who chairs the Senate's Appropriations Subcommittee on the District of Columbia, is mulling introducing a flat tax in the District. His intentions are not so much noble as they are inquisitive, though. Brownback referred to the District as a "laboratory" for a flat tax scheme that could then be implemented nationwide. Noted the article:
Brownback said that making D.C. a test case would, with limited potential for negative impact, provide valuable data about the effects of a flat tax that would prove helpful in determining whether it should be applied nationwide.The flat tax would apply only to the federal income taxes District residents pay, not the three-tiered system of local taxes. The article quotes experts from the Heritage Foundation and the Tax Foundation, who argue that the flat tax would improve the city's business climate and flood city coffers with additional revenue. Brownback and his staff similarly note that it may help attract back many of the middle class residents who fled the city's high property taxes for Maryland and Virginia over the last decades. Opponents of the flax tax idea claim it places the burden of taxation on the poor and middle classes.
Steve Forbes, editor-in-chief of Forbes Magazine, advocated a federal flat tax in his 1996 and 2000 presidential bids. Brownback may be prepping for the same -- he is a rumored candidate for the 2008 Republican presidential nomination.
D.C. Mayor Anthony Williams responded not to the substance of the proposal, but rather its implementation:
"Leaving aside the merits of this proposal, we continue to resist any efforts on the part of any member of Congress to impose rules and regulations on the people of the District."The District has long been subjected to the whims of Congress, be they Brownback's recent opposition to a District plan to allow gay couples to file taxes jointly or Rep. Mark Edward Souder's yearly quest to overturn the city's restrictive gun laws.
While DCist's jury remains out on the idea of the flat tax, we do shudder at the description of the District as a "laboratory," especially if overseen by Brownback. What's next?
We give credit where it's due. Thanks to D.C. Metblogs for the scoop.
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Brownback: There's a real winner for those of us who are "East Coast liberals." Sticking him in charge of DC pretty much represents the Republicans' thumbing their noses at this heavily-Democratic city.
Countdown until that asshat Rees ruins yet another DCist thread: 3, 2, 1...
Ugh. More taxpayer funded social engineering backed by a twit Senator who doesn't know how to govern what he's been put in charge of in the first place. And from a state that favors loony voodoo mumbo jumbo over established science at that.
I have an idea, why not run his stupid experiments in Kansas? Of course, you can't run experiments in Kansas unless you're willing to entertain the idea that "natural phenomena" may not be the only forces at work.
Sounds good to me. Along with the fed-sponsored voucher program, this could be one of the few times that the phrase "We've from the federal government and we're here to help" could actually be used in unironic fashion.
Now if they could just repeal that ridiculous gun ban, which has done absolutely nothing to reduce crime while ensuring that lots of law-abiding people are defenseless. OK, I take that back -- it's been a boon for the bulletproof glass industry.
Opponents of the flax tax idea claim it places the burden of taxation on the poor and middle classes.
HAHAHAHAHA... yeah, like those of us in the middle class living in the District aren't getting raped tax wise. We already shoulder the f**king tax burden in this town. Not only that, unlike our neighbors everywhere else in the DC metro area we pretty much have to pay for our kid's private education on top of our nation leading tax burden.
I think we've had some cultural confusion here. Sam is just trying to prove that he really cares about DC. In the last year he's offered to pay low income couples to get married and made sure we don't accidentally give gays equal standing. In Kansas those are good things. Once somebody explains that it's different here I'm sure we'll have a big laugh and this will be sorted out.
-WDC
We gotta cut Kansas some (a little? a tiny bit?)slack. They did vote out the ID-loons this year. Maybe they'll vote out Sam as well.
D: Kansas did not vote out the pro-intelligent design crew. You're thinking of the school board elections in Dover, PA.
Why don't we ask for what our licenses plates do?
Forget the flat tax, I want no taxation without representation!
Knowing what I know about Congress, that means I would never pay taxes, ever!
You're both right. Kansas' education standards were first changed in 1999, eliminating most references to evolution. The next election the anti-evolution crowd was booted out, but managed to regain a majority in election in 02 and 04, leading to the most recent ID nonsense.
Unfortunately the Kansanians have voted in favor of intelligent design. I think we need to explain this culture difference to Sam in a hurry or the helpful flat tax is going to be followed up by the loving insertion of the Flat Earth debate into DCPS.
-WDC
J Pea: Actually, sadly, Ben was right, and I was wrong. I was thinking of Dover. I appreciate that I might have been close to being accidently right, but, ah well, it wasn't to be.
Sorry for being a total Kansas apologist (somebody's got to be), but Kansans (nor Kansanians) voted for ID. The Board of Education did. If put to a popular vote, it's not at all clear it would pass.
Brownback is still a jackass, though, and your point is well-taken.
Maybe if they raise the taxes really high everyone will move out and I can afford that $400k condo I have been eyeing.
You're absolutely right. The average Kansan ('pologies for geting that wrong) didn't vote for ID nor did they allow the last schoolboard that did to stay in office. I was maybe kind of hoping for mass riots this time and probably shouldn't have been so dissapointed when they chose to wait peacefully for the next election.
If you happen to be from there is there any chance that Brownback has made his last trip to the congressional cafeteria?
-WDC
As a protax midwesterner, I do have to say that the BEST idea, would be to eliminate the federal taxes for DC. I mean given a choice: no taxation or representation, even I'D go for no taxation. I don't want those loons representing me anyway.
Andy and DC1974, how would you afford to live in the city if it became a tax haven? Okay, maybe you're ultrarich, but what about the rest of us that might have trouble if rents and housing prices (along with property taxes) quadrupled overnight if federal income tax was eliminated for DC residents and the extremely wealthy flocked in.
While I certainly don't like Brownback's politics, and really don't like Congressional efforts to decide local matters for the District, this proposal could be a real opportunity for the District, and I don't think it comprises "social engineering" as one comentator suggests.
The Brownback proposal only affects Federal taxes, not local taxes, or local expenditures. So it wouldn't affect the District in any way other than changing how District residents calculate their federal taxes, and how much they pay.
Since the GOP wants to try out this flat tax stuff somewhere, and really wants it to succceed, they are likely to formulate it so that the overall federal tax burden imposed on (flat taxed) District residents is reduced.
That would be a really positive outcome for the District.
It would entice higher income people to the District, where they would still have to pay local taxes, increasing the money available to pay for schools, roads, baseball stadiums, etc.
The idea of using the District as a laboratory for the flat tax is ridiculous. The diversity of incomes in DC is nowhere near what it is in the rest of the country--we're skewed to both ends of the scale. Of course with policies that are virtually destroying the middle class, perhaps this "experiment" if just foresighted.
That's assuming that this is a lasting change and that it would be politely implemented. If the balance of power changes in the next few years '06 '08 we can expect that this provision would be stripped with gusto. If people expect the provision to be temporary they certainly aren't going to move here.
Further there's no evidence that it would be applied lightly here to make the proposal look good. Regardless of the performance of the tax it will be presented as a success and any opponents will be written off as typical anti-republican DC residents.
Depending on how low they set the flat rate it could simply make living in the city unaffordable for middle income while not offsetting the districts high local tax enough to attract residents.
This also assumes that my beloved city government wouldn't jack up the taxes when the overall tax burden drops.
Of course this could all be a stunt like the push to allow handguns in the district. We won't know until he names his preferred tax burden.
-WDC
Oh, the idea of non-local federal officials using DC as a "laboratory" for ideas that have not attracted enough support for adoption elsewhere is beautiful.
How about testing other ideas on us? I've always wondered about fascism: Would it really be that bad?
Hey Stating The Obvious,
Hate Rees but he is the only candidate running who has proposed on the DC level a property tax cut for the middle class and poor, income tax cuts too for the same, a windfall tax on real estate bums, make the rent control laws apply to all who rent even 1 unit and more but NOOOOO you call him assssssssssss but ignore that his logic fits yours'. YOU DUMB ASS. No wonder you live in the shit because you put these assholes who are now in power in power!
Please go away. Please. Just do us a favor and leave us alone. We like our calm, respectful discussions. I'm not calling you a name, "Gloria." Just leave us alone here. There are plenty of other DC blogs for you to go flame. Let us have our peace already.
This is a bastardization of the original flat tax proposals for the District, which I believe were floated by Jack Kemp way back when. This would have called for the suspension of Federal taxes for DC resident in lieu of a flat city tax on residents. The tax would have been somewhere in the 12-17% range with the first $25,000 or so exempted (to account for working poor, etc.). There would have been variables such as mortgage deductions etc.
While I do not favor congressional oversite of the District, anything that gets us on par or better with our neighboring jurisdictions is a step in the right direction.
Andrew
Oh come on, Gloria is a good friend of Rees's. They just lunched today, afterall:
http://groups.yahoo.com/group/dcward3/
Penny
WDC, you raise some good points.
As for whether the tax changes would be permanent or temporary, no taxes changes are ever really permanent, and people make decisions based on tax consequences all the time.
You're definitely right that there's no evidence that the proposed flat taxes would be applied lightly here. But there's no evidence that thay'd be more heavily applied either. I guess I'm just a glass half full kind of person. The GOP certainly has the incentive to apply them lightly because it would bolster their policy argument.
What makes you think that the burden would fall more heavily on the middle class? I think that depends on what the rate is, and we don't know the answer to that yet.
Ughhh. I knew it would come to this.
Gloria, interestingly enough, posts from the same IP address that both Jonathan Rees and Karen Hoffman have used. Again, not saying their is a link, but that's a mighty coincidence.
Martin
DCist.com
So Martin: Could you guys please just ban that IP address? Nothing good has come of it. It brings out the worst in everyone on these boards.
That's evidence that he's been posting repetitive, off-topic comments to DCist under the guise of someone else. Doesn't the violate the comment policy? Doesn't that warrant at least a suspension of that IP for a few days?
Martin:
PLEASE don't ban him until after he attempts to explain "Gloria's" IP address away. You just -know- this alibi's going to be the looniest one yet!
If we have to put up with his abuse, at least we can get one moment's pleasure out of the guy.
JDR: I agree, I think that’s the point we’re going to keep getting stuck on. Without Brownback putting a rate forward we can argue this either way with great conviction (which I’m sure is part of the point in not stating a rate).
I’m inclined to be skeptical of the move since it comes on the heels of other proposals of his which were not in the interests of the majority of DC residents. Generally the flat taxes are described as simplifying life for the middle class, lowering the burden on the working poor, and lowering the burden on the extremely wealthy. Unless you’ve have a highly tiered tax (which would come close to defeating the purpose) I’m not sure that I understand how you would apply this without unfairly impacting one of the groups, relative to their previous level of taxation.
But yeah. Until Sam actually puts his numbers where his mouth is we’re twisting in the wind.
-WDC
Are you people nuts? Holy shit, I would kill for a flat rate. Who cares who's advancing the idea? Granted, I agree it's pointless to argue without seeing an actual proposal, but chances are it would be a tax cut for me, and probably a lot of people on this board. Even if you're against tax cuts on some principal, this would be a tax cut that would be relatively insignificant to the federal budget, but potentially hugely significant to DC residents.
God, you guys bitch so much about how the federal government screws DC residents, and finally they offer you a tax holiday and you have to start bitching about the Kansas School Board. Jesus you need to step out of your fanatasy world where absolutely nothing a Republican does could ever be good.
So what tax bracket are you in? If you've got some background on this that convinces you you'll be well served please share.
And out of curiosity where else in this disscussion did you see any one bashing Brownback because he's republicans Most of the comments towards Brownback have been based soley on his record. Which has, so far, been openly hostile towards DC.
-WDC
A flat tax starting at $40k coupled with little to no tax on savings or investment would do wonders for the poor of D.C.
My only complaint is that the rest of the country should enjoy the benefit of such a plan.
I am in the 28% tax bracket. I imagine most other people here are at least in the 25% bracket. Most flat tax proposals have a rate somewhere in the teens. And yes the flat tax can lower taxes on all but still maintain the same revenue because it would eliminate a lot of loopholes and costs of tax enforcement. Plus there would be more money in the economy because estimates put the cost of just of complying with and enforcing the US tax code at 10%-20% of the federal revenues (i.e. it costs the government and the people 10%-20% just for the people to pay and the government to receive the taxes).
And I take your point about the Republican argument. But my point was that by shifting the argument to ID, which has nothing to do with the proposal, people (I guess in this case, DCist Jason) are trying to say "Hey look, these are the same crazy republicans who believe in ID, so this policy must be bad". He didn't say Republicans, but he might as well have.
Thank you. Thankyouthankyouthankyou.
I can support a flat tax that includes all income sources as taxable, otherwise, no.
On the other hand, I'm all in favor of implementing a school voucher program in DC. Once our school board gets through with it, there's not a community in the nation that will touch it with a ten foot pole. It'll set the voucher movement back 50 years.
The U.S. Government has six territories including DC but only DC residents pay federal income taxes and can vote for a president but their congressman has no vote.
DC would become a powerhouse of businesses and our population would probably triple if residents of DC were exempt from federal income taxes and those other hidden federal taxes people in the other 5 territories don't have to pay!
I'm fairly sure that the revenues gained collecting by closing "loopholes" and reducing the costs of collecting taxes (assuming that this would even be possible - after all, returns still have to be processed) will add up to a quarter of a trillion dollars or more. Because that is what will be lost by cutting the taxes for the wealthiest 20% - who pay over half the taxes - in half. On the other hand, I would have no problem lowering the taxes of the lowest 80% if we returned the wealthiest 10% to a 55% bracket and instituted a 15% tax on all corporate revenues to be dedicated to funding a universal healthcare system...
It's all fine and dandy to talk about this, but come one - it's never going to happen. But I have to admit, it's a brilliant ploy, since the Brownback/Forbes contingent can come away appearing to actually care about DC, while at the same time getting some traction for their flat tax plan, and heaping huge benefits on a variety of folks and firms who would stand to gain thousands of dollars a year from this. (If you're a K St. lobbyist living in McLean, making $500K and paying anywhere close to 30% in fed taxes -- even a more realistic 25%-- a 17% flat tax in DC would make it worthwhile to pick up a million-dollar condo in the city as your "residence," basically paying for itself.)
But to suggest that DC would make a good "laboratory" for actually *testing* the idea is about as credible as proposing a new artic research facility in Tampa. As others have pointed out, the demographics of DC differ considerably from the rest of the country. But what's more, DC is tiny, with a superpermeable border. It's so easy to move back and forth between DC, MD, and VA that I am sure DC would get a surge of new residents if it really got flat tax in the teens. I wouldn't be all that surprised if revenue from DC even increased -- a huge influx of rich folks claiming residence here could probably do that. But it would say little if anything about the viability of a national flat tax.
Oh, and "Gloria"? Stating the Obvious didn't call Rees an "ass" (even with lots of extras "s"es). He called him an "asshat." It means, uh, "really nice guy." So, uh, everything's fine here. Go on home now, OK?
Friends, Romans, Countrymen and Artificial Intelligent DCists lend me your ears.
Do we really believe that all outside politicial leaders have it in for us?
Isn't that a bit paranoid?
Would we be better off concluding that they just don't know what they are doing and we just happen to live in a city of mad scientists and we are their rats?
Flat taxes don't work- look at sales taxes and road tolls. end of story. next!
Don:
What are you talking about? In what way do sales taxes and road tolls prove that a flat tax won't work? In what way do they not work themselves? Are you merely pointing out that they are regressive taxes? Whether it's regressive or not, that doesn't prove anything as to whether flat taxes would work or not.
If you want a comparison that actually makes sense, look to the eastern European countries that adopted flat taxes in recent years. I'm not suggesting that their positive experiences necessarily prove it would work here, but if you're against flat taxes, you have to explain why it their success won't happen here too.
check out Craigslist forums tonight. Rees has spammed almost ALL of them, once again violating Craigslist posting rules....and the responses people are making are absolutely priceless.
He'll get flagged off by staff and users soon(for, like, the 800th time in 30 days), but meanwhile, enjoy the poetic justice.
Yup, JRs prohibited posts got pulled. Visit them on CL's "Isle of Misfit Threads" (appropriately enough). There's a link on the Feedback Forum homepage. it's a riot!
You are in court watching a trial and then the prosecution makes this off the hook, damning statement about the defendant. The defense councel objects, the judge sustains the objection and instructs the jury to ignore what was just said but you know that will be almost impossible.
Now you artifically intelligent DCist readers get a load of this. I know that when I post something on CL in a spamming way it will get pulled like last night but not until 385 people looked and 63 wrote a positive email in response to what they read.
You nerds are nerds and have no business smarts or you would see the marketing ploy there!
Also: Spamming wastes valuable staff and user time. The flagging process keeps everyone from enjoying CL.
Also: Posting the same message in every forum is prohibited by craigs user agreement.
Oh, why bother? This idjit has me actually trying to explain why spamming is wrong. As if it needed explaining.
CALL IT WHAT YOU WANT BUT IT WORKS.
Please ban his IP. Please.
I don't think he -- or any of his ridiculous aliases (Gloria, Karen, etc) -- has ever made a coherent, intelligent, or relevant comment. Ever.
Go away, Jonathan Rees. Please, just go away.
So, Rees has just stated that ethics don't matter to him.
Nice.