DC Council Raises Income Tax Rate on High Earners

[jsteele]

Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

[Anonymous]

jsteele wrote:Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

Minor correction. The municipal bond tax is not being dropped. Municipal bonds purchased after Dec. 31, 2011 will still be taxed, but those purchased beforehand will be grandfathered in.

[jsteele]

Anonymous wrote:
Minor correction. The municipal bond tax is not being dropped. Municipal bonds purchased after Dec. 31, 2011 will still be taxed, but those purchased beforehand will be grandfathered in.

Thanks. I didn't catch that.

[Anonymous]

jsteele wrote:Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

Wasn't the old rate 8.5%? So this is a 0.45% increase?

[jsteele]

Anonymous wrote:
Wasn't the old rate 8.5%? So this is a 0.45% increase?

Yes, you are correct. My source was apparently wrong, but I just checked the CFO's webpage and you are right.

[Anonymous]

Anonymous wrote:

jsteele wrote:Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

Wasn't the old rate 8.5%? So this is a 0.45% increase?

Oh, good Heavens! That *will* make me & Mrs Moneypenny seriously reconsider living in DC! Going Galt, y'all!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

jsteele wrote:Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

Wasn't the old rate 8.5%? So this is a 0.45% increase?

Oh, good Heavens! That *will* make me & Mrs Moneypenny seriously reconsider living in DC! Going Galt, y'all!

So I make a million dollars a year. This means I will pay an extra 2900 in taxes? I'd move, but the cost to hire a plumber to relocate my gold plated commodes to VA will exceed that. Still, how will I endow the trust for the perpetual care of J Paul Kitty and Howard Mews? Their portfolio has taken a horrible hit as it is. Haven't they suffered enough?!!

[Anonymous]

Of course, I love the fact that the DC Council decides to raise income taxes on the same day that Vincent Orange and others suggest raising Council salaries -- just to show that DC operates in a sort of alternative political universe from anywhere else. I don't mind paying taxes for services, but I do wish the Council would eliminate the waste like Council earmarks or the pretty useless consitutency offices in the Office of the Mayor, which together cost several milliioin $$ per year: LGBT affairs, Latino affairs, Asian-PAC Islander affairs, etc. They're politically popular in some quarters, but they're not "core" municipal services -- they put they don't put a single cop on the street, educate a kid or put out a fire.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

jsteele wrote:Everyone be careful not to get run over by U-Hauls heading to NW. The DC Council just voted 7-6 to increase the income tax on those with than $350K taxable income. This will, of course, cause all such individuals to move to Virginia.

In exchange, the tax on municipal bonds is being dropped.

The new tax will sunset in 4 years. Evans, Orange, Barry, Bowser, K. Brown, Catania voted against the increase. Mendelson, Thomas, M. Brown, Cheh, Wells, Graham, and Alexander voted in favor of the new bracket. The rate is 8.95% as opposed to the 8% rate now paid above $40k. This is a new bracket that will only affect income above $350k (please Google "marginal tax rates" before you go bonkers about this).

Note: anyone who opposes the new tax bracket will be siding with Barry.

Wasn't the old rate 8.5%? So this is a 0.45% increase?

Oh, good Heavens! That *will* make me & Mrs Moneypenny seriously reconsider living in DC! Going Galt, y'all!

Yes, if you make a half a million dollars a year (in TAXABLE income), your extra tax liability will be . . . $675. Truly backbreaking.

[Anonymous]

I'm with David Catania on this. Councilmembers who are delinquent on their own DC taxes have a lot of nerve raising taxes on others!

[Anonymous]

Darn. With the extra taxes of $675, now I'll only be able to spend $325 on my "celebration" handbag this year!

http://www.dcurbanmom.com/jforum/posts/list/180662.page

Seriously, though, we aren't close to this tax bracket, but we live comfortably and I don't think it's fair that people with our HHI pay the same rate as those making $40K annually. And the council members who say that people will leave DC over this puny tax increase are disingenuous at best.

[Anonymous]

I think we'll see a lot of outrage by the Joe the Plumbers out there (i.e. solid middle-class and below, but aspirational, who get outraged at the thought of the merest slight against the uber-wealthy). Meanwhile, for folks who actually have money, I expect it won't even register. Especially those who live in DC.

[takoma]

Anonymous wrote:I think we'll see a lot of outrage by the Joe the Plumbers out there (i.e. solid middle-class and below, but aspirational, who get outraged at the thought of the merest slight against the uber-wealthy). Meanwhile, for folks who actually have money, I expect it won't even register. Especially those who live in DC.

Politico claims there is "middle-of-the-road rage" over Obama's "soak-the-rich liberal populism" (http://www.politico.com/news/stories/0911/64004.htm). Over a proposal about taxing people making over a million bucks? WTF????

[Anonymous]

"Politico claims there is "middle-of-the-road rage" over Obama's "soak-the-rich liberal populism""

You mean putting more burdens on the "job creators"?!
Seriously, over the years the GOP has managed to convince much of Mr. and Mrs. Middle America that they need to oppose the "death tax," even though Federal estate taxes hit some very small percentage of estates.

[takoma]

Given the unemployment, I find it amazing that anyone with a job would complain, let alone people making hundreds of thousands.