DC Council raises tax for wealthiest residents
(AP, ABC7) - The D.C. Council has voted to raise income taxes for the district's wealthiest residents.
After an at times heated debate, the Council voted 7-6 Tuesday to hike the tax rate for residents making $350,000 or more to 8.95 percent. The current top tax rate is 8.5 percent, which applies to all residents making $40,000 or more.
The higher income tax rate is expected to bring in $106 million over four years and will take the place of a retroactive tax on out-of-state municipal bonds.
The Council voted to let the new tax rate expire after four years.
Councilmember Phil Mendelson, an at-large Democrat who introduced the tax hike, says it's sound policy not to make the bond tax retroactive and to make the income tax rate more progressive.
Chairman Kwame Brown was one of the six who voted against the tax increase. “At the end of day some people just wanted to raise taxes,” he said.
Councilman Jim Graham voted for the tax increase. “It makes sense to turn to those who have everything and say ‘we need your help,’” he said.
The new tax rate goes into effect at the start of the new fiscal year this October.
Officials say a little over 5,000 people will be affected.