- The Washington Times - Tuesday, February 17, 2004

Lawyers arguing for the Districts right to impose a commuter tax told a federal court judge yesterday that Congress is discriminating against D.C. residents by not allowing the city to collect income tax from those who work in the city but live elsewhere.

Attorney John W. Nields Jr. told U.S. District Court Judge Ellen Segal Huvelle that Congress had set up a “discriminatory tax system” that favors congressional constituents, principally in Maryland and Virginia, at the expense of D.C. residents who have no representation in Congress.

“As a result, there is a structural deficit that no matter what the Council does, no matter how efficiently they run their government, they have to overtax their residents,” said Mr. Nields, who brought the lawsuit on behalf of a handful of D.C. residents, along with D.C. Mayor Anthony A. Williams and all 13 D.C. Council members.

The lawsuit challenges provisions of the Home Rule Act of 1973, which, in effect, has exempted about 70 percent of the 1.7 million people who work in the city.

But Justice Department lawyer Rupa Bhattacharyya said because Congress, acting as the Districts state legislature, has the ultimate authority to set policy for the District, legislators are within their rights to deny city officials the right to impose the tax.

“Their power is derivative of Congress. have only as much power as Congress chooses to give them,” Miss Bhattacharyya said. “Thats all they seem to be arguing here is who has the right to make that legislative choice.”

Mr. Nields also said restrictions on imposing a commuter tax violate the equal-protection clause of the U.S. Constitution because it does not prohibit any other jurisdiction from taxing money earned within its borders.

Michael Berman, a lawyer representing the state of Maryland, responded that although states have the authority to impose commuter taxes, municipalities, such as the District, do not.

D.C. officials have complained for years that people who work in the city but live in Maryland and Virginia should help pay for roads and other infrastructure costs. If approved, a commuter tax would allow the District to impose a levy that would bring in as much as $1.4 billion from the states.

Virginia State Solicitor William Hurd said a commuter tax would be unfair because the D.C. government provides “an array of services that are not used” by those who spend their days working in the city. Mr. Hurd argued a motion filed in July by Virginia Attorney General Jerry W. Kilgore to dismiss the lawsuit.

Mr. Williams has said the tax money is essential to the city economy. Since neither state has agreed to reimburse the city, the D.C. Council and residents filed a federal lawsuit in July.

Maryland Gov. Robert L. Ehrlich Jr., Republican, has said that he opposes the tax.

Virginia Gov. Mark Warner, Democrat, said in July that the state opposed the tax and that he would oppose every effort legal or legislative to impose it.

Judge Huvelle gave no timeline for her decision.

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