DC’s tax system stands out in two key ways, according to a new analysis on how state tax policies affect families at different income levels. First, taxes on DC families living on very low incomes–below about $24,000 a year–are lower than in any state in the U.S. That good news is due primarily to income and property tax credits targeted to help residents working hard to make ends meet. But the analysis shows that families with incomes just above that level pay the same share of their income in DC taxes (income, sales, and property taxes) as the District’s wealthiest residents. At a time when the income of the top fifth of DC households is 34 times larger than the bottom fifth ($320,000 compared with $9,000)—and a time of growing income gaps between Black and white residents—the District should be asking its wealthiest residents to pay more to address the city’s inequities.
ITEP Work in Action
Advocates and policymakers at the state and federal levels rely on ITEP’s analytic capabilities to inform their debates on proposed tax policy changes. In any given year, ITEP fields requests for analyses of policies in 25 or more states. ITEP also works with national partners to provide analyses of federal tax policy proposals. This section highlights reports that use ITEP analyses to make a compelling case for progressive tax reforms.
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ITEP Work in Action October 17, 2018 DC Fiscal Policy Institute: Narrowing Income Inequality Through the Tax Code
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ITEP Work in Action January 22, 2018 DCFPI: As High-Income DC Taxpayers Reap Large Federal Tax Windfalls, DC Can Make Our Tax Code More Progressive
According to recent estimates from the Institute for Taxation and Economic Policy (ITEP), District of Columbia residents can expect to receive an $850 million federal tax break this year.
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ITEP Work in Action August 28, 2017 DC Fiscal Policy Institute, Maryland Center on Economic Policy, and The Commonwealth Institute: Triple Whammy: A Regional Sales Tax for Metro, Like Fare Hikes and Service Cuts, Would Fall Hardest on Struggling Families
A strong Metro system is important to all of us in the Washington region. And everyone agrees that the Metro system needs new resources to rebuild its health. But a regional sales tax—a widely discussed option—would be an unfair way to pay for it.
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ITEP Work in Action February 9, 2017 DC Fiscal Policy Institute: Revenue: Where DC Gets Its Money
The DC government collects revenue in a variety of ways from its residents, businesses, and the federal government. These revenues are used to fund the wide array of services provided… -
ITEP Work in Action January 16, 2015 DC Fiscal Policy Institute: The Recommendations of the D.C. Tax Revision Commission Are Having a Favorable Impact on the District
The Institute on Taxation & Economic Policy (ITEP) issued its 2015 report — Who Pays? A Distributional Analysis of the Tax Systems in All 50 States – today. The fifth… -
ITEP Work in Action May 12, 2014 DC Fiscal Policy Institute: Making DC’s Tax System Fair: Progress in the 2015 Budget
Most DC residents — like most Americans — agree that income tax rates should be graduated by income. Low-income households should pay the lowest rate, so that there is an… -
ITEP Work in Action May 8, 2014 D.C. Tax Revision Commission: Final Report
On Dec. 18, 2013, the D.C. Tax Revision Commission unanimously approved a set of recommendations designed to improve the District’s tax system and help its residents and businesses prosper.The Commission’s… -
ITEP Work in Action January 14, 2013 DC Fiscal Policy Institute: Raising Revenue by Creating a New Tax Bracket for Top Earners: A Progressive Approach to Addressing DC’s Budget Shortfall
A DC Councilmember has proposed raising the income tax rate on the District’s wealthiest residents as a way to generate money for next year’s budget. The idea has been met… -
ITEP Work in Action January 14, 2013 DC Fiscal Policy Institute: Expanding the District’s Sales Tax Can Raise Revenue, While Increasing Tax Fairness
In response to the most recent revenue shortfall, the DC Council voted in July 2009 to raise the District’s sales tax rate from 5.75 percent to 6 percent. Raising revenue… -
ITEP Work in Action January 14, 2013 DC Fiscal Policy Institute: Tell It Like It Is: Combined Reporting Improves DC’s Tax System By Making Corporations Disclose Their Profits and Pay Their Fair Share
Mayor Fenty and the DC Council recently approved an important reform to the District’s corporate income tax which will prevent large corporations from avoiding taxes. The law, known as “combined… -
ITEP Work in Action January 14, 2013 DC Fiscal Policy Institute: The Middle Class Squeeze: DC’s Tax System Falls Most Heavily on Moderate-Income Families
Families in the District with incomes of $20,000 to $60,000 pay one-tenth of their incomes in DC property, sales, and income taxes, according to a new study by the Institute…