DC Council votes to raise taxes on the “rich”

[Anonymous]

That’s how the WaPo headline writer phrased it.

I’m a DC resident, so obviously I’m not a “low tax” anti-public service zealot, or we’d live elsewhere. I like cities. I like public services. I support taxes and redistribution.

However, with the Trump tax change having eliminated deductibility of SALT, I do believe this is terrible policy.

For my family, we love DC and have many reasons to be here. But with each passing year of paying among the nation’s highest SALTs and not getting a deduction on our fed taxes, we will find it harder and harder to justify living in the District, vs. following the trend of NY’ers who have moved in shocking numbers to FL (sorry, but yuck) or NH… or Austin(?).

This is a major topic of (hard) conversations, among friends, and among the senior mgt of some of the professional service firm employers in the city (where employees/partners are agitating to move to lower tax jurisdictions). We want to stay, but will the city leaders understand that, depending on your fed tax bracket, we’ve all already experienced what is effectively a 50-67% increase in the true cost of our DC income taxes at the current tax rates?

All this by way of saying, the DC Council has their head in the sand about this issue impacting the relative attractiveness and competitiveness of DC in a new era of non-deductibility of SALT. Will be interesting to see if the Mayor does as well.

I suspect this post will get some pushback, but if we want our city to be attractive and competitive vs alternatives, we’d be better off having a city government that was a bit wiser to “state” of things.

[Anonymous]

How much do you make OP? Because for people making $500,000/year or more, this is going to cost around 50 dollars per month. Less if you make over $250,000 or $350,000.

Is that really a game breaker for you?

[Anonymous]

Anonymous wrote:How much do you make OP? Because for people making $500,000/year or more, this is going to cost around 50 dollars per month. Less if you make over $250,000 or $350,000.

Is that really a game breaker for you?

Yes. It's affecting the rich, not the "rich." We're a bit over the threshold and definitely are rich compared to most people in DC, and we'll be paying an extra dollar or two a day. If you are going to be paying a large amount, then you are definitely very rich.

I'm perfectly willing to accept that some people who are on the edge of deciding to move might actually because of this, but be honest: It's a $6,500 increase for people making $1 million. That's not going to make a big difference in your standard of living.

[Anonymous]

We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

[Anonymous]

Anonymous wrote:That’s how the WaPo headline writer phrased it.

I’m a DC resident, so obviously I’m not a “low tax” anti-public service zealot, or we’d live elsewhere. I like cities. I like public services. I support taxes and redistribution.

However, with the Trump tax change having eliminated deductibility of SALT, I do believe this is terrible policy.

For my family, we love DC and have many reasons to be here. But with each passing year of paying among the nation’s highest SALTs and not getting a deduction on our fed taxes, we will find it harder and harder to justify living in the District, vs. following the trend of NY’ers who have moved in shocking numbers to FL (sorry, but yuck) or NH… or Austin(?).

This is a major topic of (hard) conversations, among friends, and among the senior mgt of some of the professional service firm employers in the city (where employees/partners are agitating to move to lower tax jurisdictions). We want to stay, but will the city leaders understand that, depending on your fed tax bracket, we’ve all already experienced what is effectively a 50-67% increase in the true cost of our DC income taxes at the current tax rates?

All this by way of saying, the DC Council has their head in the sand about this issue impacting the relative attractiveness and competitiveness of DC in a new era of non-deductibility of SALT. Will be interesting to see if the Mayor does as well.

I suspect this post will get some pushback, but if we want our city to be attractive and competitive vs alternatives, we’d be better off having a city government that was a bit wiser to “state” of things.

How much is it actually going to cost you each year? Or is it just the idea of the thing that gripes your britches?

[Anonymous]

I've lived in DC for 25 years. Our HHI is roughly $600,000. There's no way I would leave DC due to this tax increase, alone. Maybe if I was already contemplating a move, it might factor into a con but, frankly, my husband's latte addiction probably costs us this much a year.

[Anonymous]

I would pay $400 today if I thought it would actually help anything.

[Anonymous]

Anonymous wrote:We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

It couldn't have been just the taxes, because for almost everyone the tax burden is higher in VA than it is in DC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

It couldn't have been just the taxes, because for almost everyone the tax burden is higher in VA than it is in DC.

DP. I doubt you’ll find many people arguing that the tax burden alone is why they moved or are moving. But it is certainly one factor among many. I’d be willing to accept a slightly higher tax burden if in return DC schools were of the same quality as VA schools and our crime problem was not worse.

[Anonymous]

This was very dumb move by the DC council. As the article states, DC is flush with money right now. There is literally no need to raise taxes. It's just a crazy left-wing mania to take money from high-earners.

This will be a tipping point for some, perhaps more than expected, to leave. With remote work options, many more high earners have the flexibility to choose where they live.

[Anonymous]

Anonymous wrote:We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

That is why there is DC-TAG, to offset 10k of tuition for public universities.

DC also allows all municipal bonds to be tax-free (not just DC bonds) - this is a major inducement for the senior community to stay in the District in their retirement and pay little to no DC income taxes if they plan right.

Virginia has the tag tax, which, combined with the other state and local taxes, makes the burden in Virginia higher than DC.

[Anonymous]

Anonymous wrote:This was very dumb move by the DC council. As the article states, DC is flush with money right now. There is literally no need to raise taxes. It's just a crazy left-wing mania to take money from high-earners.

This will be a tipping point for some, perhaps more than expected, to leave. With remote work options, many more high earners have the flexibility to choose where they live.

And for those who leave, there will be a line willing to pay over a million or two dollars for their house, and happy to pay these "extra" taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

That is why there is DC-TAG, to offset 10k of tuition for public universities.

DC also allows all municipal bonds to be tax-free (not just DC bonds) - this is a major inducement for the senior community to stay in the District in their retirement and pay little to no DC income taxes if they plan right.

Virginia has the tag tax, which, combined with the other state and local taxes, makes the burden in Virginia higher than DC.

it doesn't get you instate admission standards though. Assuming that your kid can get in and that you don't care about that aspect-

UMD college park: in state 9k plus room and board, out of state 36k plus room and board
UVA: in state 35k, out of state 68k
UNC: in state 23k, out of state 38k
Penn State: in state 19k, out of state 36k

Of the close states, West Virginia is the only one where DC tag brands tuition inline with in state

[Anonymous]

True, but that is why DC students simply have to be better to attend those schools.

And have to work harder to get scholarship monies and merit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We moved to VA. It wasn’t just the taxes. It was also no school and no good system of public colleges.

That is why there is DC-TAG, to offset 10k of tuition for public universities.

DC also allows all municipal bonds to be tax-free (not just DC bonds) - this is a major inducement for the senior community to stay in the District in their retirement and pay little to no DC income taxes if they plan right.

Virginia has the tag tax, which, combined with the other state and local taxes, makes the burden in Virginia higher than DC.

it doesn't get you instate admission standards though. Assuming that your kid can get in and that you don't care about that aspect-

UMD college park: in state 9k plus room and board, out of state 36k plus room and board
UVA: in state 35k, out of state 68k
UNC: in state 23k, out of state 38k
Penn State: in state 19k, out of state 36k

Of the close states, West Virginia is the only one where DC tag brands tuition inline with in state

Which is why there are a ton of DC kids at places like Michigan, Wisconsin, UCSB, Indiana as well as UMD, William and Mary and UVA.