Despite the fact that the District of Columbia received $2.5 billion in federal coronavirus relief funds, the majority of the city council advanced on Tuesday the Homes and Hearts Amendment Act, which would increase the marginal tax rate for residents who earn $250,000 or more.
The plan would redistribute the wealth of successful D.C. residents to increase the salaries of child care workers, pay for housing the homeless, and provide a “basic monthly income,” to those making less than $57,414 a year.
Initial approval of the amendment was reached with an 8-5 vote and will now be part of the budget package ahead of final votes.
WTOP reported on the development, which businesses oppose and some predict will lead to more people fleeing the nation’s capital in the wake of a destructive coronavirus lockdown and an ongoing crime wave that just recently included the shooting death of a 6-year-old girl:
The act funds the “Birth to Three” law, which doubles the wages for early childhood educators, with the goal of expanding the job pool, paying living wages to those caring for children and increasing access for childcare. It also invests $65 million in new housing meant to provide some 2,400 homeless residents stable homes. The act will also provide a monthly stipend for families who are enrolled in the Earned Income Tax Credit, which means those who qualify could receive extra cash each month.
The taxpayer-funding National Public Radio affiliate DCist also reported on opposition to the amendment:
Raising taxes on the city’s top earners is a lightning rod within the business community, and the Federal City Council — an influential pro-business lobbying group led by former D.C. Mayor Anthony Williams — rallied employers against it.
If it passes final approval, the tax hike is expected to raise up to $175 million by FY 2025. Funds will go toward paying higher wages to many early childhood educators, allocating $65 million in housing vouchers to 2,400 homeless residents, and creating a monthly basic income for low-income families who qualify for the Earned Income Tax Credit starting in 2023.
The DCist reported as an example that for those making $300,000 dollars a year, the tax hike translates to an additional $31 deducted from their paychecks.
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