Mar 23, 2022 - Politics

Town Talker: The District's next big tax debate

Illustration of the Wilson building in Washington with lines radiating from it.
Illustration: Brendan Lynch/Axios

Mayor Muriel Bowser has named her appointees to a once-in-a-decade commission reviewing the tax code, setting up the next great debate over tax rates at a time when the city is flush with cash.

Why it matters: The sticking points this year will likely involve whether the District’s richest residents should pay more and if business tax breaks are necessary for a pandemic recovery.

  • The D.C. Tax Revision Commission has convened three times in the past, and it prepares a report for city leaders with lengthy recommendations.
  • Historically, progressives have slammed the panel as reluctant to raising taxes.

Driving the news: Council chair Phil Mendelson says he was blindsided by the mayor's picks on Monday, after he reached out over a month ago.

  • "I was completely taken off guard, and actually a bit angry, because once again, there was an opportunity to collaborate, and the mayor refused," says Mendelson, who gets to pick five other appointees.

Details: The mayor appointed:

  • Former Mayor Anthony Williams, who chaired the previous commission and now runs the Federal City Council, a top business group.
  • David Catania, a former fiscally conservative council member who in 2018 co-founded a lobbying shop.
  • Carolyn Rudd, chair of the D.C. Chamber of Commerce board.
  • Jodie McLean, CEO of EDENS, the developer of Union Market.
  • James Hudson, who served on the 1998 tax commission.

The big picture: Some on the left are already venting frustration over the outsized influence of the business lobby on the panel.

What they’re saying: “I have great respect for each of these appointees as individuals, but this is like putting together a commission on energy in the 21st century and appointing only members from the oil & gas industries,” tweeted independent council member Elissa Silverman.

Between the lines: Some critics question if three of the mayor’s five appointees qualify as tax experts, as required by statute.

  • Williams, Catania, and Hudson were nominated as tax experts, said mayoral spokesperson LaToya Foster. McLean represents the business sector and Rudd is a community representative, in line with the commission's requirements, Foster said.

For progressives, Catania is already a target of criticism, given his conservative fiscal stances as a 17-year lawmaker.

  • Ed Lazere, the former head of the left-leaning D.C. Fiscal Policy Institute who served on the tax commission in 2013, says Catania ushered through a tax break for tech companies in 2001 that was “a complete waste of money.”
  • The D.C. Council cut the subsidy in 2019, a year after D.C.'s independent chief financial officer found the tax break was costing the city $40 million a year in uncollected revenue.
  • Catania did not return an email seeking comment.

What’s next: Mendelson says he wants the commission to be "a little more creative" finding additional revenues for the city.

  • The last commission was "a little too timid," he says. "We're much more sensitive today than we were ten years ago to issues of equity."

💬 Town Talker is a weekly column on local politics. If you can make descriptions of tax policy sing, drop me a line: [email protected]

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