DC Sales Taxes Going Back Down to 5.75% Starting October 1st


Thanks to a reader for sending. Sales tax originally was increased from 5.75% to 6% back in 2009.

When the decrease was voted on earlier this year, the Washington Times had reported:

“An amendment introduced by council member Tommy Wells, Ward 6 Democrat, that would have swapped the sales tax reduction for increased deductions on residents’ income taxes was struck down in an 8-5 vote. Mr. Wells and Mr. Evans are running for mayor next year.”

Which would you have rather had – a reduction in sales tax or increased deductions on income taxes?

23 Comment

  • Emmaleigh504

    I would rather have a reduction in sales tax.

  • Would much rather have a reduction in sales tax – helps the people at the bottom most.

  • So they left the current rate in place for most services used by tourists. And things like parking, restaurants, booze, tobacco that residents are going to buy regardless. Nice politics-they get the credit for giving people a break, but leave most of the cash cows unaffected. IMO, a sales tax break gives us money in hand now and has the potential to give back to more Washingtonians-especially in the lowest socioeconomic classes. I’d be very surprised if they had been able to pass a tax cut that would give us a more significant break than this will bring.

  • justinbc

    Lower sales tax, give me the money now rather than later.

  • The answer (sales vs. income tax) really depends upon your income level. High income earners (like me) benefit more from a reduction in income tax rates. If you live paycheck to paycheck, you pay proportionately more in sales taxes.

  • I’d take the income tax deduction. Sales taxes are paid by everyone who shops here – including non-DC residents. Better to target the benefit to DC residents.

    • Interesting point.

      However, they targeted the reduction to goods that are mostly bought by local residents. Prepared foods, booze, parking, etc – which are the things most commonly purchased in DC by MD and VA residents – are not seeing a decline.

  • We shouldn’t kid ourselves about the income inequality trade-offs here. Someone spending $20,000 on eligible items would save $50. The income inequality problems in the US are way bigger than this sort of tax code tinkering, and sometimes these basically trivial actions provide a lot of cover for politicians not to pursue meaningful remedies.

    • Amen. By contrast, raising the minimum wage by $1 per hour would mean ~$2000 PER YEAR for a full-time, low-wage District worker. Not only would she probably put that money back into the local economy, it may reduce the burden on public assistance.

      • Agreed, this needs to happen sooner rather than later. Wish they would do it federally, but absent that, time to walk alone. Maryland raising theirs will give us cover (and remove negative effects of businesses locating just across the border.) the number I heard was $1 above the federal min wage was the sweet spot, but with increasing population, and more and more high income people, I am sure that difference is slowly expanding.. I could see raising it .75c a year for the next several years.

      • Disagree Raising the minimum wage is not the answer, sure it might help some people who depend on these jobs that forgot to get an education and work their way up in society, but it ultimately hurts the consumer who will have less buying power due to the companies will raise their rates for the products and services the provide.
        Awesome job Mayor Gray! Finally a democrat with true free-market principles.

  • I do wish they had pushed up the standard deduction though. That seems like a better way to do it. Less taxing of work, more taxing of consumption, even on a small scale seems better to me.

  • i wish property taxes would decrease. But of the choices above…Income Tax would be preferred.

  • Sales tax is regressive, but the income tax in DC is only just barely progressive, anyway. I would like an increase in the cutoff for the 8.5% bracket. Move it to maybe $75K, and then increase the rate enough to make the change revenue neutral.

    It’s weird that a $300K lawyer and a $50K are in the same marginal tax bracket here.

  • I almost want to say income tax because you can kinda control your sales tax by shopping else where. For those that don’t have actual income, our poorest of poor, then the sales tax should be lowered because a reduction in income tax doesn’t help them at all.

Comments are closed.