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Are New Tax Brackets a Good Idea?

I saw this sign on 11th St, NW on Sunday and then this morning received the following email from Save Our Safety Net:

Wed, May 19, 2010
8:30 AM – 9:30 AM

We’re in the final stretch of the DC budget process — and millions of dollars of funding for safety net services are at stake.

We’ve proposed that the City can save our safety net by creating new tax brackets for the highest-earning 5% of DC residents. Six Councilmembers have declared their support for progressive tax increases — but we need a seventh!

So on Wednesday May 19th, we’re going down to show City Council what a real safety net looks like. We’ll ask Councilmembers to join us in building the net that keeps our city healthy and stable.

And to do all this, we need you too! Come down to the Wilson Building (1350 Pennsylvania Ave NW) to join with us in this action.

Further explanation:

The top tax bracket in DC currently starts at $40,001. (That means everyone making more than that pays the same tax rate.) The city could raise approximately $50 million in revenue by creating additional tax brackets: 9% for DC residents earning more than $200,000 (a .5% increase), and 9.4% for those earning more than $1,000,000 (a .9% increase). Together, these increases would affect less than 5% of our population — but they would enable the city to protect safety net programs that keep our communities safe and strong.

Do you think creating additional tax brackets is a good idea or will it drive wealthy residents out of DC?

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