- The Washington Times - Monday, July 14, 2003

D.C. officials and other activists were in City Hall yesterday, trying to consolidate support for a federal lawsuit that would overturn the U.S. Constitution and federal laws that granted the District home rule. Their goal is to levy a commuter tax on people who work in the District but live elsewhere. Congressmen and senators from Maryland and Virginia oppose changing the Constitution and the law, and we do as well.

For years, D.C. officials have argued that their inability to impose a commuter tax means a loss of revenue. Their recent claims put the loss at $1.4 billion, a figure put forth last fall by the Brookings Institution. Maryland benefits the most, Brookings said, with 65 percent, or $900 million of the $1.4 billion, flowing into its coffers, while Virginia gets 35 percent, or $480 million. Of course, to even term those dollars as “loss” revenue is misleading, since D.C. officials never had their hands on that money to begin with.

The Constitution grants Congress considerable authority over the District, and the home rule act follows with specific restrictions on taxing authority. In fact, the 1973 D.C. Self-Government and Governmental Reorganization Act forbids D.C. lawmakers from enacting all manner of laws. For example, Section 602, among other things, specifically forbids the D.C. Council from:

• Imposing “any tax on property of the United States or any of the several States.”

• Enacting any act or repeal any act that “concerns the functions or property of the United States or which is not restricted in its application exclusively in or to the District.”

• Imposing “any tax on the whole or any portion of the personal income, either directly or at the source thereof, of any individual not a resident of the District.”

Yet, that is precisely what the D.C. Council wants with the lawsuit and two pieces of legislation. One bill, the Commuter Tax Act of 2003, would universally tax all people who work in the District but live elsewhere. The other, the D.C. Government Nonresident Employees Tax Act of 2003, would impose an income tax on people who work for the D.C. government but live elsewhere. Both pieces of legislation have the unanimous support of all 13 lawmakers. The legislation easily targets teachers, firefighters, law-enforcement officers, health-care and social service workers, because the overwhelming majority of them live in Maryland and Virginia and, rightly, pay their income taxes to those states.

Both pieces of legislation propose the same income tax rates for non-D.C. residents: Individuals earning up to $10,000 would pay the District .5 percent of their income taxes; people earning between $10,000 and $40,000 would pay 1 percent; and people earning more than $40,000 would pay 2 percent.

As we have said, they swaddle their argument in the soaring rhetoric of liberation: states’ rights; taxation with representation; the loss of revenue. There is even talk of erecting tolls in the city to capture commuter dollars and fill city coffers with greenbacks.

There are no precise figures on how many nonresidents actually work in the District (one estimate puts the number at 500,000). Still, if the city were permitted to impose a commuter tax, the consequences would be laughable, if not downright frightening: What would D.C. government do with $1.4 billion in additional annual revenue?

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