Bill would shift taxes to D.C.

Md., Va. commuters would pay 2% of salaries, under plan

Federal legislation

April 25, 2000|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

Thousands of Maryland and Virginia residents who work in Washington might soon be leaving something behind in the city: income tax.

Under a proposal that Del. Eleanor Holmes Norton, a District of Columbia Democrat, plans to introduce in Congress on May 2, suburbanites, who make two-thirds of the income earned in Washington, would have 2 percent of their salaries redirected from federal income taxes to the city. The plan would not affect commuters' take-home pay or the amount of their state taxes.

The tax, which is supported by Mayor Anthony A. Williams, would raise an estimated $400 million for the city in the first year.

Norton said the city needs to tap the income of suburban workers -- whose cars, she said, outnumber residents' 9 to 1 on the city's streets -- to survive.

"They use the services of the district -- police, fire, roads, water, trash," she said. "Services that district residents pay for, commuters use free of charge. We are not asking for them to pay for them, we are asking to spread the cost to the nation, since we are the nation's capital."

The proposal, which will be introduced as part of a package of tax credits aimed to bolster the city's economy, is essentially a direct payment from the federal government to the district.

Employers, including the federal government, would send part of the employee's income taxes to the district. The payment would be listed on employees' W-2 forms and would be claimed as a credit on their federal income tax return.

But some of Norton's nearest congressional neighbors, including Republican Rep. Constance A. Morella of Montgomery County, questioned the necessity of allotting more funds for the struggling city.

"Congress has really already given the city the ability to succeed, and this new payment may not be necessary," said Jonathan Dean, Morella's press secretary.

While the proposal has drawn some early criticism, it is not unusual for tax districts to impose a tax on nonresidents. A Brookings Institution study shows that all states that assess income taxes also impose taxes on nonresident income. But because it is a federal district, Washington cannot levy such a tax without the permission of Congress.

Wire services contributed to this article.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.