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Pandering on Taxes

Though it is nothing new, I am still amazed at the pandering politicians do when it comes to taxes.

On Monday the District announced its best audit results in years. It was confirmation that we once again have an administration that is focused on bringing long-term financial stability to the City. This is the kind of financial oversight that people say they want and that we haven’t had since Mayor Tony Williams’ administration.

So instead of discussing the importance of this audit result to the District, what do the Council chair and the chair of the Council’s Finance Committee do?

They immediately begin talking about potential new tax cuts and lamenting recent tax increases. They do this without any real review of where the potential future problems will be within the city’s budget based on the impact of a continuing slow economy and the real danger of less federal funding coming into the District.

What is interesting is that this pandering seems unnecessary. There hasn’t been any great outcry from District residents about D.C. income taxes. Many of the approximately 6,000 people that were impacted by the .4% rate increase in their income taxes, from 8.5% to 8.9%, most likely didn’t notice any difference in their lives. In addition, the impact of the increase was actually less than the .4% as they could take that small increase and deduct it from their federally taxed income.

One of the biggest benefits of the District once again being able to rebuild its reserve fund is that it will put us in good stead with the bond rating agencies, keeping our credit ratings high and thereby potentially lowering our long-term debt costs.

Instead of talking about lowering taxes it would be better for the Council to focus first on continuing to comb the budget for more cost savings. Then it would serve all residents well if they reviewed all the programs where additional spending could make a real difference in the long term for all the people of the District. Among those programs could be infrastructure, public safety, education, and job training.

Another area that could use some increase in funding in the District is the arts. We often forget that a strong and vibrant arts community often brings much more revenue into the District than the contribution that we make from public funds.

In the coming years there will most likely be cuts in various programs that we count on from the federal government. These include healthcare, public transportation, education and housing programs to name a few. We should begin planning for that eventuality, not just cut taxes today and find we have to raise them again a year from now. When government is efficient and watches our money carefully, the public is generally much more accepting of paying taxes.

I suggest all of our politicians have a conversation about efficiency, productivity and producing the best possible services for the people of the District instead of immediately making the easy call and suggesting lowering taxes because they think it makes them more popular.

By Peter D. Rosenstein