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PRESS RELEASE: FEDERAL CITY COUNCIL APPLAUDS EFFORTS TO MAKE DC TAX SYSTEM MORE FAIR AND COMPETITIVE

WASHINGTON – The Federal City Council applauds the DC Council’s vote today to support the overwhelming majority of the tax cuts recommended by the DC Tax Revision Commission. The DC Council’s vote to adopt these recommendations expeditiously makes a strong statement about the District’s commitment to creating a fair and competitive tax system.

The DC Tax Revision Commission was chaired by Anthony A. Williams, CEO and Executive Director of the Federal City Council. Federal City Council trustees Mark Ein of Venturehouse Group and Pauline Schneider of Ballard Spahr also served on the Commission. The Commission’s recommendations were approved on a unanimous basis by the members of the Commission after an 18-month evaluation period that included 26 public meetings, 27 expert presentations, and three public hearings.

According to Mr. Williams, “the DC Council’s recommendations maintain the balanced approach endorsed by the Commission of enhancing the fairness of the DC tax system – particularly for those in the middle class – and enhancing the competitiveness of the District of Columbia as a place to live and locate a business.”

The changes proposed by Chairman Phil Mendelson and approved on first reading today by the DC Council will result in $165 million in tax relief for DC taxpayers that enhance the tax system’s fairness and competitiveness. Tax cuts that will enhance the fairness of the tax system include the creation of a new middle class tax bracket, an increase in the personal exemption and standard deduction to federal levels, and an expansion of the EITC to childless workers. Tax cuts that will make the system more competitive include a reduction in the corporate and unincorporated business franchise tax rate to 8.25 percent (to match the level in Maryland) and an increase in the threshold at which estates are subject to the estate tax to $5.25 million (to match the federal level).

The Commission received continuous support throughout its tenure from Mayor Vincent C. Gray, Chairman Phil Mendelson, Councilmember Jack Evans, and CFO Jeffrey S. DeWitt.