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Brown pitches tax plan to D.C. wealthy

Council member Michael A. Brown met Thursday morning over breakfast with the city's elite: the wealthy residents who would be affected by the "millionaire's tax" being pushed by several council members in an effort to generate revenue for the fiscal 2011 budget.

Brown (I-At Large) pitched his version of the tax to more than a dozen wealthy residents. He said he wanted to see if there would really be the "rich flight" that opponents have predicted, and wanted the chance to convince them that the tax would not be as much of a burden as believed.

The council member is proposing the creation of new income tax brackets: 8.9 percent for residents earning $250,000 and more annually and 9.4 percent for residents earning $1 million or more. The current tax rate is 8.5 percent for residents earning $40,000.

The Office of the Chief Financial Officer has crunched some estimates for Brown, with predictions that the change would generate more than $22 million in fiscal 2011; nearly $40 million in 2012; more than $43 million in 2013; and about $47 million in 2014, said Kilin Boardman-Schroyer, Brown's legislative director.

Judith Sandalow, executive director of the Children's Law Center, said Brown asked her to pull together residents "who were totally against it, who were for it and who were somewhere in the middle."

She said those in attendance responded to Brown's breakdown of the costs when looking at a bi-weekly paycheck. They also discussed giving back to the city and the drawbacks of fleeing to the suburbs. "There were a lot myths debunked," Sandalow said.

Younger residents who attended the breakfast meeting -- mostly attorneys -- were opposed.

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But Burke Stansbury, 33, a Mount Pleasant resident and wealthy heir, said people left with a different view. "It's kind of ridiculous when you look at the numbers," he said. "In my case, it would be $200 a year. It's not the kind of thing that would get people to uproot themselves and leave their neighbors and friends."

Stansbury said they all began to weigh losing the city's amenities and sitting in traffic to commute to the city for work.

Attorney Paul Taskier, who is a board member at Bread for the City, said the conversation revealed that moves to the suburbs were more attributable to the public school system than taxes. "The real factor was that there are no public schools that are acceptable. ...You tend to have to go private schools. That's a $30,000 hit a year," he said, adding that moving to Fairfax County, where schools are in better academic shape, drives people out of the city.

Taskier, 54, who said he has sent his children to public and private schools, said Brown "is making a pretty reasonable proposal."

"We're in a city where those who have ought to be able to help those who don't," said Taskier, who lives in Observatory Circle.

Daniel Solomon, a founder of D.C. Vote, said his attendance at the meeting prompted him to write a letter to council Chairman Vincent C. Gray (D) and council member Mary Cheh (D-Ward 3) today to express his support and that of his wife, Jane Solomon, for the Brown's proposal.

He wrote: "As a couple that will have to pay the tax increase, let me say why we are supportive:

1) the marginal increase in our taxes will be truly marginal, perhaps $1,000

2) the increase will bring us close to parity with Montgomery County taxes, so it's not going to drive anyone out of the city

3) the increase will bring our tax rate back close to what it was several years ago

4) during times of need, those who can afford to pay the most should shoulder the biggest burden for those who are less fortunate, which is the teaching of most religions and many political philosophies."

-- Nikita Stewart

By Washington Post Editors  |  May 13, 2010; 5:08 PM ET
Categories:  Budget , City Finances , City Life , D.C. Council , Nikita Stewart  | Tags: Chief financial officer, Michael A. Brown, Revenue, Taxation  
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Comments

It's not a tax on "the wealthy." It's a tax on high-income earners, who may or may not be wealthy. People who live off capital gains and dividends taxed at 15% are more than happy to let the government tax to death two-income-earning couples working 2x80 hour weeks to pay for child care and private schooling. At least the tax increase will keep Nieman Marcus in business when they embezzle the extra $$.

Posted by: HT12 | May 13, 2010 10:21 PM | Report abuse

This coming from a DC government that has increased its budget something like 50% in 5 years. Is it that hard to figure that you just have to cut back on these programs that probably never should have been? It's one thing to help the truly needed, and quite another to start viewing the help as an entitlement. But I guess bill like these help the Councilman get votes from those in need. And that's apparently all he cares about. His legacy (and that of the ward he represents) begone !

Posted by: JohnSmith7 | May 13, 2010 11:18 PM | Report abuse

Makes a lot more sense than prospect of tax on theater tickets -- which hurts the local economy and future of the arts far more than those who can afford to pay it.

Posted by: esthermiriam | May 13, 2010 11:21 PM | Report abuse

Makes far more sense than the prospect of tax on theater tickets, which would be damaging to local economy and future of the arts, but not a threat to those who can afford...

Posted by: esthermiriam | May 13, 2010 11:23 PM | Report abuse

Just shows that one can assemble a dozen morons from any wealth bracket.

I believe Montgomery County had similar self-serving assurances just before they chased half their tax base away.
.

Posted by: gitarre | May 14, 2010 7:03 AM | Report abuse

Wow. Good people who believe they can afford a slight tax increase to help the less fortunate. Of course, the main opposition was from a group of lawyers who probably never have the interests of others at heart unless it lines their linty pockets.

Posted by: pjohn2 | May 14, 2010 7:44 AM | Report abuse

This seems like the perfect answer to the blight of "White flight" the city is just now starting to overcome.
Idiots.

Posted by: Hypocritic | May 14, 2010 8:53 AM | Report abuse

What??!! People making 40K currently get taxed at the highest rate?! Unbelievable! I can't stay in DC forever.

On the upside though, I am impressed that Brown took time to talk to the grumblers. And I'm even impressed that some were very agreeable to the tax hike. Myself, I would be afraid of how many more times this might happen. It's not like DC is known for managing money responsibly.

Posted by: forgetthis | May 14, 2010 9:36 AM | Report abuse

The people wouldn't leave either. They would simply establish their primary residence (Read as taxable residence) somewhere else? Say a vacation home in FL which has no income tax. The idiocy of these people is astounding.

Posted by: jasonmason | May 14, 2010 10:09 AM | Report abuse

I think it's a great idea. And as someone who plans to be in that tax bracket in the foreseeable future, I honestly think the tax is still far too low. What happened to the good old days when the rich were taxed at double-digit percentages?

Posted by: outlawtorn103 | May 14, 2010 10:25 AM | Report abuse

jasonmason, I actually used to work for a firm here in DC where the CEO actually had a mansion here in the city limits where he slept every night. But for some reason, his pay stub said that his "residence" was in West Virginia. I was a kid then and I didn't get it at the time. I get it now.

Posted by: forgetthis | May 14, 2010 10:32 AM | Report abuse

THIS IS COMING TO WASHINGTON D.C. SOON. YOU GOTTA TAKE CARE OF YOUR BROTHER........HOW CAN ANYONE VOTE DEMOCRAT? BUNCH OF FOOLS


If you live in Philadelphia, higher property taxes and a fee for trash pickup may be two things you'll pay for next year.

Philadelphia City Council approved Mayor Michael Nutter's $3.9 billion budget for 2011 with a vote Thursday evening.

To fill in a $150 million budget gap, officials made several tax increases, the most notable being a 9.9-percent jump in property taxes, officials told NBC Philadelphia. That increase will only last for two years.

Posted by: twotimetuna | May 14, 2010 10:44 AM | Report abuse

Why am I NOT suprised that Brown stacked the deck by only inviting those residents whom he knew would support his proposal?

The reporter should have done his job and asked non-attendees their views, rather than swallowing this PR event hook, line, and sinker.

Posted by: WashingtonDame | May 14, 2010 11:31 AM | Report abuse

Thanks for chasing your high-earners to Virginia.

Posted by: millionea81 | May 14, 2010 11:57 AM | Report abuse

"But Burke Stansbury, 33, a Mount Pleasant resident and wealthy heir, said people left with a different view. "It's kind of ridiculous when you look at the numbers," he said. "In my case, it would be $200 a year. It's not the kind of thing that would get people to uproot themselves and leave their neighbors and friends."
---------------------------------------

... said the guy who has never earned anything ...

Posted by: HughJassPhD | May 14, 2010 1:18 PM | Report abuse

Go for it DC council! That millionaire tax has worked out great for Maryland. Follow in their footsteps and then you can wonder where they all went and why tax receipts on millionaires has dropped. ROTFLMAO!!

Posted by: 0460 | May 14, 2010 1:23 PM | Report abuse

Okay, before raising taxes how about collecting the current ones? It is estimated that thousands of homeowners are claiming the homestead deduction, though they rent the property. How about cutting government fraud and waste? How about doing an audit of public housing. How can people in public housing afford those expensive cars we see in the parking spaces. HELLO!

Posted by: dcpsychic | May 14, 2010 1:37 PM | Report abuse

Let's see when Congress passed the original Federal Income tax it was 1%. Once this door is open just watch the top bracket in DC climb to 9.4% to 10, 12, 14 to 22% and it will still not be enough.

I wish the country was better at math. It's a percentage, which means the more you make the more you pay. Someone making 100K @ 8.5% pays $8,500, someone making 1M @ 8.5% pays $85,000. Percentages take into account inflation & earnings. What percentages don't take into account is the gov'ts need to grow and spend more money than they take in.

Posted by: madmax8600 | May 14, 2010 2:12 PM | Report abuse

how'd that millionaires tax work out for Maryland and Montgomery County?

Posted by: skinsfan15 | May 14, 2010 3:06 PM | Report abuse

Another lesson that seems to be in the details here is that if you're going to charge MOCO tax rates, then you'd better provide MOCO or Fairfax quality and not DC quality schools.

Posted by: blankspace | May 14, 2010 4:00 PM | Report abuse

To sum up, trust fund babies, politicos, and NGOs that stand to benefit from a tax increase are all for it. That's what I learned from this article because people falling into each of those categories are quoted in this latest example of balanced Post reporting.

I also learned that "[y]ounger residents . . . mostly attorneys [read: evil people]" are opposed to the the new tax. Why? I don't know because the Post doesn't quote any of them. Maybe it's because they already pay a lot in DC and federal taxes and work hard for what they earn (alas we all can't be "wealthy heirs").

Post: If you want to report that certain interested groups want to pay higher taxes, more power to you. Just don't try to spin this as some kind of consensus among people who earn >250k.

Posted by: wotan1066 | May 14, 2010 4:31 PM | Report abuse

To sum up, trust fund babies, politicos, and NGOs that stand to benefit from a tax increase are all for it. That's what I learned from this article because people falling into each of those categories are quoted in this latest example of balanced Post reporting.

I also learned that "[y]ounger residents . . . mostly attorneys [read: evil people]" are opposed to the the new tax. Why? I don't know because the Post doesn't quote any of them. Maybe it's because they already pay a lot in DC and federal taxes and work hard for what they earn (alas we all can't be "wealthy heirs").

Post: If you want to report that certain interested groups want to pay higher taxes, more power to you. Just don't try to spin this as some kind of consensus among people who earn >250k.

Posted by: wotan1066 | May 14, 2010 4:31 PM | Report abuse

WOW! Some of the have's don't want to part with their ill-gotten gain; what a surprise!!! How often has someone dropped their daddy or grand-daddy's name to do a hard working person out of a job based solely on legacy and now you want to scream; please pay up or move away! Bye, Bye, who needs you!!!

Middle income families and working poor have been taxed to death by DC and the feds and now because we can no longer carry this burden alone, the wealthier amongst us are crying. Well, maybe if your ancestors had embezzled a little more and put away some of that slave labor money you would be better fixed to pay your share.

It amazes me that rich folk always cry foul when they are asked to pay their share.

Posted by: lacairaine | May 16, 2010 1:57 PM | Report abuse

WOW! Some of the have's don't want to part with their ill-gotten gain; what a surprise!!! How often has someone dropped their daddy or grand-daddy's name to do a hard working person out of a job based solely on legacy and now you want to scream; please pay up or move away! Bye, Bye, who needs you!!!

Middle income families and working poor have been taxed to death by DC and the feds and now because we can no longer carry this burden alone, the wealthier amongst us are crying. Well, maybe if your ancestors had embezzled a little more and put away some of that slave labor money you would be better fixed to pay your share.

It amazes me that rich folk always cry foul when they are asked to pay their share.

Posted by: lacairaine | May 16, 2010 1:58 PM | Report abuse

This is not a "millionaires'" tax. The City Council is considering imposing it on people making as little as 25% of that. Those people are high earners, but aren't millionaires. They are also the most likely to move to Arlington or Bethesda and they are the people in Arlington and Bethesda least likely to move into DC.

This is yet another clear example that DC is not ready for Home Rule. This is one time I am glad that Congress is there as there is little question but that Congress will step in and block this tax increase.

DC needs to live within the cash it has available. Just like the rest of us.

Posted by: NMGDC | May 16, 2010 6:17 PM | Report abuse

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