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Proposal to tax more D.C. services meets with protests

Health club members and Yoga lovers flooded D.C. Council members with e-mails Thursday after word spread that the council might consider a new tax on health club memberships to help fill a $550 million budget gap.

The Washington Post reported last week that several council members were putting everything on the table, from pet grooming to club memberships.

Mayor Adrian M. Fenty (D) made a campaign promise in 2006 that he would not propose new taxes, but he has accepted ones proposed by the council. Last year, the council raised cigarette, sales and gas taxes to cover a deficit. The Fenty administration, meanwhile, has pushed fee increases, such as meter rates.

This year, the D.C. Fiscal Policy Institute, a local think tank, is listing services that have never been taxed to tap for revenue. The idea is that consumption has shifted from goods to services, and the city's tax code is behind the times. Other jurisdictions across the country that felt the brunt of the recession before the District have come up with similar taxes.

Also pushing the idea is the Fair Budget Coalition, which is made up of three dozen nonprofit and advocacy organizations and is circulating a proposal to extend the sales tax to the services in question.

While council members Michael A. Brown (D-At Large) and Jim Graham (D-Ward 1) are trying to convince their colleagues to join them in raising taxes on the city's wealthier households, the taxes on services haven't gained traction.

That didn't stop local yoga outfits and gyms from contacting council members. "Things have gotten a little uncorked here," Graham said. "I've received 2,869 e-mails since 8:35 a.m."

Staffers for council member Mary M. Cheh (D-Ward 3) said they received about 2,000 e-mails.

Doug Jefferies, owner of the Results Gym chain, and David von Storch, owner of the Vida Fitness chain, are also mobilizing in opposition to a tax on gym memberships or classes.

Council member Jack Evans (D-Ward 2), chairman of the Committee on Finance and Revenue, said he wants his colleagues to hold the line on all taxes. Increasing them, he said, "is a real mistake."

Evans said the city needs to cut its expenditures, or next year, taxes will have to be raised again.

Here's a list of services currently not taxed that the institute would like the council to consider:

Admission to cultural events
Art conservation/restoration services to individuals
Art/antique collecting advisory and brokerage services
Carpet and upholstery cleaning
Chimney cleaning services
Closet/storage design consulting services
Commissions on auction purchases/sales (brokerage service)
Custom processing (on customers' property)
Dating services
Day spa services
Diaper service
Fur storage
General house cleaning services
Health clubs, tanning parlors, reducing salons
Household errand/"personal shopper"/gift consulting/management consulting services
Installation charges -- other than seller of goods
Interstate air courier (billed in-state)
Kennels
Magazines
Marine towing service (including tugboats)
Massage services
Membership fees in private clubs
Packing and crating
Personal instruction (dance, golf, tennis, etc.)
Pet grooming
Private investigation (detective) services
Swimming pool/hot tub cleaning and maintenance services
Taxidermy
Vehicle security monitoring services

-- Nikita Stewart and Tim Craig


By Washington Post Editors  |  May 6, 2010; 5:49 PM ET
Categories:  Budget , City Finances , City Life , D.C. Council , Mayor Fenty , Nikita Stewart , Tim Craig  | Tags: d.c. council, emails protest services tax, proposal to tax services protested, taxes, taxing services  
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Comments

Another DC tax? DC government has an operating budget of over $5 billion. That's just operating, not capital. $5 billion should be enough. Taxes drive people out and deter new taxpayers from moving in. Duh.

Posted by: ObjectiveReader1 | May 6, 2010 7:40 PM | Report abuse

Remember the good old days when the cab drivers brought cash flow into the city?

Posted by: starclimber9 | May 6, 2010 8:14 PM | Report abuse

If you drive a car,
I'll tax the street.
If you try to sit,
I'll tax your seat.
If you get too cold,
I'll tax the heat.
If you take a walk,
I'll tax your feet.

Posted by: gbooksdc | May 6, 2010 8:22 PM | Report abuse

Either cut welfare benefits for the lazy people who hang out on the streets drinking beer all day waiting for the first of the month OR make them do some kind of work in the community to earn the welfare check. I'm tired of busting my hump every day going to work so I can pay taxes so those tax dollars can to to welfare so completely healthy young men can hang on the streets and do nothing all day and complain about how all their problems are the fault of someone other than themselves.

Posted by: UrbanDweller | May 6, 2010 8:31 PM | Report abuse

"Uncorked"?. Graham needs to take a note from Jack Evans or there won't be any "wealthier" residents left to tax.

Posted by: badphish | May 6, 2010 11:03 PM | Report abuse

Sigh. I can't wait until I can retire and leave the DC area for someplace sane.

Posted by: WashingtonDame | May 7, 2010 7:56 AM | Report abuse

JESUS CHRIST. I am a huge liberal, but enough is enough on the taxes DC. The bag tax was egregious enough, and now this? Maybe it's time to start reducing spending if you're not raising enough revenue to cover expenditures. This is insane.

Posted by: AdmiralX | May 7, 2010 9:24 AM | Report abuse

I have a great idea -- just stiff D.C.

Bring bag-lunches to work. Drive out to the suburban Wal-Mart with free parking to get your stuff. Leave Washington to do your business. Incorporate in Delaware.

Don't spend one more penny in this city.

NOT ONE MORE CENT!!!!!!!!!!!!!!!

YEEEEAAAGGGHHHH!!!!!!!!!!!!!!!!!

Posted by: bs2004 | May 7, 2010 9:48 AM | Report abuse

Well, note how Jim "Taxi Cash" "AIDS Grift" Graham did not call for a tax on all cash monies delivered in brown paper bags via staff bagmen to elected officials presiding over District Council committees with jurisdiction over relevant legislation. Nor, on all cash monies in aforementioned brown paper bags stored in electronic freezing devices, under beds, in boyfriend's old gym bag, etc. Nor, on art, antiques,antiquities, gold, diamonds, etc. proffered in lieu of cash for obscene profits derived from off market real estate deals, kick-backs, etc.

And Graham, great friend of the LGBT community, wants to tax the gym memberships but meanwhile gives 7M to his crony, the internet gay underwear salesman, to save his arse in a condo building scheme he was never qualified to undertake from the get go!

Ah, Jim Graham, the gift that keeps on giving!

Posted by: JackStar | May 7, 2010 10:17 AM | Report abuse

The Fair Budget Coalition works for a just and inclusive budget for the District of Columbia. We welcome community discussion about how to fund essential city services. In this economic recession, safety net services have been cut to the detriment of low-income families. Because revenue increases included in last year’s budget have fallen most heavily on low- and moderate-income residents, we urge the Council this year to consider ways to reduce the budget gap that are more balanced, including increase the income tax for DC’s wealthiest citizens, ending D.C.’s tax exemption for interest paid on out-of-state bonds, updating the sales tax to include more services, and others.

Posted by: eappel | May 7, 2010 11:00 AM | Report abuse

I am very supportive of increasing taxes on services. Quite frankly I don’t understand what has taken them so long to update our outdated system…DC population has continued to grow and with the economic crisis DC is facing more and more people are in need of services not just people who are homeless who are on the streets but families who have been working for 20 plus years paying taxes and still paying taxes are in need services….for those who feel like they are being taxed to death just think of how many children who can’t work and parents can’t afford day cares, summer camps, or even doctors’ visit you will be helping. And keep in mind that job training programs were cut as well so many people are unable to go and find jobs as you suggested.

Posted by: ConnectedHeart | May 7, 2010 11:06 AM | Report abuse

Hey - I've got an idea! How about eliminating no-bid million $$ contracts to connected political supporters? Or stopping embezzlement by mid-level DC gov't managers by implementing proper audit procedures? Or increasing sales tax revenue by reducing restrictive parking regulations and fees in the cities entertainment and shopping districts?

Has the nanny-state DC Council ever met a tax it didn't like ?

Posted by: dipazzo | May 7, 2010 11:36 AM | Report abuse

It's a knee-jerk reaction to say that people will leave DC if taxes go up, but taxes are already lower in Virginia. if people really moved based on these things, why isn't there an exodus from DC to VA? For that matter, income taxes in Maryland are higher than in DC (and they still would be if the proposed income tax increase on the wealthiest went into effect). But I don't see people fleeing Maryland for DC either...

It's a simple fact--small changes in tax rates don't lead the vast majority of people to make big changes. The may cause small changes in behavior, like declining to take a plastic bag, but they don't lead people to move. Let's get real.

Posted by: matt731 | May 7, 2010 11:37 AM | Report abuse

all of the posters here who are complaining about the potential tax..what are you doing? I suspect not one thing. This is not about lazy people sitting around on welfare or hanging on the street corners drinking beer as one poster stated...this is about making sure that the "core" services which are used and "needed" by many does not have a negative impact on these families. I simply do not understand how some people can be so selfish and uncaring ...i guess because at this moment it is not directly affecting you and your household...but my how the tables will turn in your thinking if/when you are a victim of poverty .. layoffs... etc. what the council is proposing is not that far fetched. Come on people where is the compassion..as one poster stated this is about making sure that parents can continue to work because they have stable daycare...or making sure that children are able to attend summer camp... or simply ensuring stable households..as we all know family homelessness is at an all time high... for all of you who are so concerned about your gym memberships being taxed.... how many of our low income and moderate income families can even afford gym memberships??? You are selfish and self-centered in your thinking and i have to assume in your living as well..this generation of i got mine ... you get yours will be our fall and demise .... no one is asking you to give hand outs... they are asking you to sacrifice a little so that others may gain a lot..... you should try it sometimes ...

Posted by: ReflectionofLyfe | May 7, 2010 11:50 AM | Report abuse

yoga. But, I also acknowledge and understand the reasons behind them (i.e., to help fill the budget gap, etc.). At the same time, I have to disagree with the assumption by some that people who attend yoga classes and/or have gym memberships are all wealthy and thus should not complain since they can afford the extra tax. Yes, of course there are wealthy people who go to the gym and go to yoga (and use massage services and have their pets groomed and go to the spa, etc.). But, there are also your regular, average, moderate/middle income people who choose to make other sacrifices because health and wellness is important to them. Yes, maybe it would be better for me to put my monthly gym fee toward paying off my student loans or saving for retirement. But staying healthy and in shape is important enough to me that I’m willing to scrimp somewhere else in my budget so that I can continue to go to the gym. I guess my point is, even though I’m not thrilled with the tax proposals, I get the reasoning behind them, if they proposals are adopted, great, I’m not going to go protest about it. But, I resent the notion that these kinds of tax proposals on various services affect only wealthy DC residents.

Posted by: DC84 | May 7, 2010 1:27 PM | Report abuse

To be honest, I am not that happy with the proposed new tax on health club memberships and yoga. But, I also acknowledge and understand the reasons behind them (i.e., to help fill the budget gap, etc.). At the same time, I have to disagree with the assumption by some that people who attend yoga classes and/or have gym memberships are all wealthy and thus should not complain since they can afford the extra tax. Yes, of course there are wealthy people who go to the gym and go to yoga (and use massage services and have their pets groomed and go to the spa, etc.). But, there are also your regular, average, moderate/middle income people who choose to make other sacrifices because health and wellness is important to them. Yes, maybe it would be better for me to put my monthly gym fee toward paying off my student loans or saving for retirement. But staying healthy and in shape is important enough to me that I’m willing to scrimp somewhere else in my budget so that I can continue to go to the gym. I guess my point is, even though I’m not thrilled with the tax proposals, I get the reasoning behind them, if they proposals are adopted, great, I’m not going to go protest about it. But, I resent the notion that these kinds of tax proposals on various services affect only wealthy DC residents.

Posted by: DC84 | May 7, 2010 1:27 PM | Report abuse

Apologizes about the accidental double-post.

Posted by: DC84 | May 7, 2010 1:30 PM | Report abuse

@ DC845...no one state that the proposed tax increase only effect the wealthy...if you felt this way then it is because you didn't read what i said coherently.... besides i was responding to prior posters that were lamenting about the proposed tax increase as if it were a bad thing... of course no one.. my self included desires to pay higher taxes... my sentiment is however, if it will in fact allow working mothers and families to continue to go on with there already established lives with little to no negative impact on them ..then what is the big deal. I am in no way wealthy..but nor am i destitute...but i don't see harm in doing "my share" in ensuring that the same "basic" rights and necessities that are awarded to me and my family should be extended to those less fortunate.....

Posted by: ReflectionofLyfe | May 7, 2010 1:40 PM | Report abuse

It is not as if I want to penalize the poor, but I oppose new taxes in DC on the basis that DC has some of the most generous social services programs in the country and for all the taxes I pay as a modestly successful person, I get very little in return. I don't qualify for housing subsidies, I don't qualify for property tax relief, I don't qualify for mortgage assistance, I don't qualify for healthcare subsidies, I don't qualify for child-care assistance, I don't qualify for any of the services that DC chooses to provide to others. Why? Becuase I paid attention in school, valued education and took advantage of opportunities that were presented to me, worked hard, and I mean HARD, got a good job, did the work and got paid a fair (not extravegant) wage for it.
I am by no means a conservative, or a selfish man, but when I see so many in this city wasting opportunity, getting into trouble when they have so much assistance available to them, when I see people getting heavily subsidized home child care (babysitters paid by the city), and money thrown at all sorts of services I am left to pay on my own, I resent it. I resent having to help pay for things for others that have had similar opportunities as me, and who have chosen to squander those opportunities. We did not always live in a "hand up" society. There was a time when people had to take care of themselves, and it is time that we got back to more of that. The entitlements have got to be curbed, and people have to have the fear of hitting the ground and not a safety net to start taking things seriously. Because if I fall, it will be a hard landing.

Posted by: pjglazer | May 7, 2010 3:38 PM | Report abuse

The council left off "the air we breathe" from the list.

Posted by: logan303 | May 7, 2010 3:38 PM | Report abuse

How about issuing Carried Concealed Weapons Permits, at $500 a piece, for four years? Guaranteed revenue stream and a "no lose" situation?

Posted by: Computer_Forensics_Expert_Computer_Expert_Witness | May 7, 2010 3:45 PM | Report abuse

I would be okay with higher taxes on those services, it seems a reasonable updating of an outdated tax law. However, I would prefer a portion of the new funds be used to conduct performance audits of every DC department, agency, and office, to identify mis-spent, unspent, stolen, and lost funds. As Harriette Walters taught us, it is very likely that enormous amounts of money are to be found right under our very noses.

(yes I know we have an auditor already)

Posted by: mendelsonmustgo | May 7, 2010 5:47 PM | Report abuse

If you drive a car,
I'll tax the street.
If you drive to city,
I'll tax your seat.
If you get too cold,
I'll tax the heat.
If you take a walk,
I'll tax your feet.

'Cause I'm the taxman.
Yeah, I'm the taxman,
And you're working for no one but me.

Posted by: win_harrington | May 7, 2010 9:44 PM | Report abuse

The comments to this entry are closed.

 
 
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