D.C. Council rejects tax on the wealthy

The D.C. Council rejected Wednesday a proposal to raise income taxes on residents who earn $350,000 or more annually.

Although the council continues to debate the budget, the council has now all but ruled out higher property or income tax increases next year. The council is expected to extend the city's 6 percent sales tax to sweetened beverages and assess a tax on medical marijuana.

The proposal to raise taxes on the wealthy was made by Council member Jim Graham (D-Ward 1). Currently, all District residents who earn $40,000 or more pay an income tax rate of 8.5 percent. Graham proposed raising the rate to 8.9 percent for residents who earn $350,000 or more a year. Graham argued the increase was needed to boost funding for social service programs and the Office of Latino Affairs.

But Graham's amendment was rejected by a vote of 8 to 5. The majority argued wealthy residents would flee the city if taxes were raised.

Council Chairman Vincent C. Gray (D-At large) joined Mary M. Cheh (D-Ward 3), Muriel Bowser (D-Ward 4), Kwame Brown (D-At large), David I Catania (I-At large), Jack Evans (D-Ward 1), Phil Mendelson (D-At large) and Yvette Alexander (D-Ward 7) in voting against Graham’s proposal.

Along with Graham, Marion Barry (D-Ward 8), Tommy Wells (D-Ward 6), Michael Brown (I-At large), Harry Thomas Jr. (D-Ward 5) supported raising the income tax on the wealthy.

--Tim Craig