When is a tax hike really a tax cut?
When you let D.C. Council member Jim Graham do the math, apparently.
The Examiner reports that several tax experts and officials believe Graham's recent proposal to add more taxes to D.C.'s wealthiest residents will actually give them a tax break, instead.
Ryan Ellis, tax policy director at Americans for Tax Reform, which opposes all tax increases, says the bill would reduce taxes. “The bill as written is a massive tax cut for D.C. households making over $500,000 per year.” Ellis added, “According to this bill, someone with taxable income of $499,999 would pay $41,300 in D.C. income tax. Someone making $500,001 would pay $5,000 in D.C. income tax.”
That would be an 88 percent reduction in taxes from current law, and would mean someone earning $500,001 in taxable income would owe less in taxes than someone earning $80,000 in taxable income.
That's quite a pickle for Graham. But even worse? His staff doesn't think anything is wrong...
Graham spokesman David Lipscomb disagreed, saying the bill “in fact does what we intend it to do,” which is to raise taxes on incomes over $500,000. Asked whether the bill contained a drafting error or a typo, Lipscomb responded, “Not that I’m aware of.”