One councilmember tore up the bill. Another called the whole idea a “vendetta.” A third compared the debate to Alice in Wonderland. Tempers flared. Parliamentary procedure seemed non-existent at times. The term “class warfare” was bandied about. And Councilmember Marion Barry (D-Ward 8) somehow ended up on the same side of a tax debate as his colleague from Ward 2, Jack Evans.
But after a few hours of back-and-forth arguing this afternoon, the D.C. Council endorsed a tax increase on residents making more than $350,000 a year, hiking the rate they’ll pay from 8.5 percent to 8.95 percent. (According to the Post’s Mike DeBonis, that’s roughly an additional $675 a year for those making $500,000 a year.) The move, which is expected to bring in $106 million over four years, passed on a 7-6 vote, but only after Councilmember Mary Cheh (D-Ward 3) successfully added in a four-year sunset provision.
The tax increase, pushed by Councilmember Phil Mendelson (D-At-Large), came about as a means to cover the $13 million it would take to delay the implementation of a new tax on out-of-state municipal bonds. That new tax, ironically enough, was added by Cheh and D.C. Council Chair Kwame Brown over the summer as a way to scrap a tax increase on those making more than $200,000 proposed by Mayor Vince Gray in his 2012 budget.
In the end, both the bond tax remained and an income tax increase passed, dealing a defeat to Brown, who vowed to get rid of the first and head off the second. He achieved neither.
The debate in the council chambers pitted traditional liberal voices like Councilmember Jim Graham (D-Ward 1) and Michael Brown (I-At-Large) against Evans and David Catania (I-At-Large), the former complaining of cuts to social services, the latter of an ever-growing government. Progressives claimed that it would inject fairness into a tax code under which a resident making $41,000 and another taking in $410,000 pay the same rate; more conservative voices repeated concerns that councilmembers were dodging difficult decisions and putting the District in an uncompetitive position relative to neighboring Virginia.
Ultimately, the sometimes catty verbal fights exposed very different visions on broader tax policy, but compressed into an unnatural time frame under which councilmembers had only today’s session to decide how to proceed before the 2012 fiscal year budget takes effect on October 1. The 2012 budget calls for the creation of a tax revision commission, though, whose 10 members will be tasked with dealing with the larger questions of tax policy and equality in the District.
Today’s events may also move Brown to tighten up on the council’s decorum — or, as the debate on the tax increase seemed to exemplify, its occasional lack of it. At one point during a particularly heated moment, Catania stopped a colleague mid-sentence, acidly asking: “Point of information, Mr. Chairman. Who’s the chairman?”
Martin Austermuhle