- The Washington Times - Wednesday, February 26, 2003

D.C. Delegate Eleanor Holmes Norton will introduce a bill in Congress seeking a transfer of federal tax dollars to the District as an alternative to a commuter tax proposed by the D.C. Council and rejected last year.
Mrs. Norton, a Democrat, yesterday said she will offer a revision of the Fair Federal Compensation Act of 2002 for this session. That bill, which Congress rejected last year, would have required the Treasury Department to transfer to the District's treasury 2 percent of the federal revenue paid by commuters.
"The congresswoman is working on a somewhat different version of the bill she submitted last term in the belief that she can get the required support needed to get the additional revenue the city needs," Norton spokeswoman Doxie McCoy said in an e-mail.
Ms. McCoy said Mrs. Norton will not make public the funding level or any details about the legislation until it is finished.
The Washington Times reported yesterday that D.C. Council members Jack Evans, Ward 2 Democrat, and Adrian M. Fenty, Ward 4 Democrat, will introduce a "commuter tax" bill at the March 4 legislative session.
Under their proposed measure, commuters whose taxable income is under $10,000 would be taxed 0.5 percent, commuters with a taxable income between $10,000 and $40,000 would be taxed 1 percent, and those with taxable income above $40,000 would be taxed 2 percent.
The commuter tax on individuals' incomes would be offset by a full credit on their own state's tax returns, the council members said.
Rep. Thomas M. Davis III, Virginia Republican, said through his spokesman the bill doesn't say how the District would work with neighboring states to make the tax-refund portion workable.
Congress gives the District enough support, said Davis spokesman David Marin.
Under the 1997 Reorganization Act, Congress pays for the District's entire legal infrastructure, including courts, corrections, prosecution and public-defender services. In addition, the city receives numerous federal grants. In total, Congress provides the District about $1.6 billion to $2 billion annually.
"Under Title VI of the D.C. Home Rule Act, the Council cannot 'impose 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,'" Mr. Marin said, reading the statute.
Rep. Albert R. Wynn, Maryland Democrat, told the Associated Press Monday that a commuter tax imposed by the District would encourage counties to impose reciprocal taxes on D.C. residents who work in their jurisdictions.
Maryland and Virginia do not tax the incomes of commuters from the District, said John Kincaid, a certified public accountant licensed in all three jurisdictions.
"The salaries of District residents working in Maryland and Virginia are not taxed, but other sources of income like the capital gains earned by property sales may be," Mr. Kincaid said.
City officials have often suggested a commuter tax, saying it is needed to offset a structural imbalance.
Two-thirds of all income earned in the District is earned by residents of Maryland, Virginia and other states, which the city cannot tap to support its budget. And 57 percent of all the District's real property is not taxable because it is owned by the federal government.
Since the District can tax only the one-third of all income earned by its inhabitants, D.C. residents are taxed at higher rates than other jurisdictions, city leaders say.
"We need Congress and the president to realize they need to either allow us to collect revenue like a state, or assume part of the responsibility for supporting the city that supports them," Mayor Anthony A. Williams said last week.


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