As local economy weakens, D.C. will consider tax increases

The big picture: The DOGE tailspin continues to weaken the economy. As D.C. grapples with rising costs of education, health care services, and other city programs, council members find themselves eyeing tax increases.

The ideas include:

• Pied-à-terre tax: One proposal would tax upscale D.C. homes that aren't an owner's primary residence at 2.5% annually, per CityCast, raising an estimated $130 million over four years. Council Chairman Phil Mendelson has another version, too, ensuring this topic will get a lot of debate.
• Sales tax: Council members will consider raising it from 6% to 7%.
• Wealth tax: Passive income — like capital gains on stocks and other investments — would get a 3% surcharge under a bill to be debated. It would apply to individuals making more than $400,000 per year, or married couples making over $500,000.

What's ahead: Those and many other proposals will be tackled at a big hearing on Oct. 16. Experts will get a chance to testify in support and opposition.

• "I do not want to sit here and say we will raise taxes," Mendelson said during a news conference Monday.
• But fleshing out tax proposals now is necessary ahead of next year's budget proposal, which will likely be Janeese Lewis George's first as mayor.