June 20, 2012 | by Peter Rosenstein
Cutting taxes isn’t always a good idea

Cutting taxes often doesn’t boost the economy and definitely doesn’t boost trust in politicians. It can be bad when done to pander to lobbyists clamoring for cuts benefitting only a few. On the national level we spent the last decade cutting taxes for the rich and for many businesses and no rational person can claim our economy is better for it. In the District, some claim we pay exorbitant taxes, which are bad for business and growth. The facts contradict that as we have huge gains in population — percentage-wise bigger than any state in the country — and an economic boom that has seen billions of dollars pour into the city.

Before calling for lower business taxes, we should survey our business owners to see which of them live in the District and how many of their employees live here. We may find many of them live outside the District and pay no income tax here. We are prohibited by Congress from charging a commuter tax, so even if you receive income here but live in Virginia or Maryland, we can’t collect taxes from you. Studies have shown that we only tax about 66 percent of the income actually earned in the District.

We should restructure some business regulations to assist small businesses, while being mindful that regulations have nothing to do with politicians being guilty of crimes. Harry Thomas, Jr. was a thief and Kwame Brown committed mortgage fraud. Neither crime had anything to do with the tax structure or the regulatory system. A regulation I support changing is the so-called “voluntary agreement,” which is often a coerced agreement. Currently five people can stop a bar or restaurant from opening or cause thousands of dollars in legal fees before they do, to fight over issues like seating capacity. That isn’t Democracy when a few people can dictate to an entire community.

In D.C., we have 14 elected officials with any real power; the school board and ANCs are basically advisory. Thirteen Council members and the mayor have power but even they can be held hostage to both budgetary and legislative review by the Congress. Everything those 14 officials do is scrutinized by a robust press corps often fighting over who can break the next real or supposed scandal. That gets a lead spot on the broadcast or the front page. Reporting good news may get 30 seconds somewhere in the broadcast or a column buried in the Metro section. There are so many local reporters, most of whom do a great job, that each of our elected officials can be covered 24 hours a day by more than one person.

It’s crucial to remember that despite political scandals, the District is the envy of most cities and states with regard to our finances, population growth, improving environment, economic growth and technology in government. That doesn’t excuse any politician from punishment for a crime they may commit and I applaud the U.S. Attorney for moving forward with his investigations. What it does show is that the crimes of our politicians won’t bring our city down.

We are one of the greenest cities in the nation; one of only seven jurisdictions with marriage equality; and we have ever expanding bike lanes. We are moving forward with school reform and have a robust Charter School system. We are the No. 1 city in the nation to do business in according to MarketWatch and the No. 1 city in the nation that college graduates want to move to. In the area of healthcare we have the fewest uninsured children of any state and the second lowest number of uninsured adults. We have had balanced budgets for the past 14 years as required by law and have more than a billion dollars in our reserve fund. We have more than $3 billion in current economic activity with cranes going up all across the city and nearly $11 billion more in the economic pipeline.

We need to rid ourselves of any crooked politician but not convince ourselves that our politicians are any better or worse than those in the rest of the nation. In November, the voters of the District will have the proverbial chance to “throw the bums out” or re-elect those they feel are responsible for the great shape our city is in. I urge people to choose carefully and not get caught up in the false hype about how bad our city is. We have good and bad politicians and a lot of great people that go to work for our government everyday putting in a long and honest day’s work. Let us not tar everyone with the same brush because of some who are dishonest.

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