Blogging Against Senator Sam Brownback Since March 2005
To no one’s surprise, Senator Sam Brownback pushed a flat federal income tax for Washington D.C. at a hearing yesterday. While Dick Armey showed up to shill for Brownback’s idea, there was pointed criticism of using D.C. citizens as economic lab rats:
Paul Strauss, the District of Columbia’s shadow senator, said it would be “unconscionable” to impose a different tax system on the city.
He sat up front at a hearing at which Brownback heard testimony from four conservative economists who support the idea.
“It is morally wrong for Congress to use D.C. as an experiment,” Strauss said. “I also find it alarming that this Congress, which has all but bankrupted the federal government, now wants to change the system in D.C., which has a budget surplus.”
I don’t have much to add to what I wrote previously on this subject. I think Washington D.C. should have real representation and should not be treated as an idea sandbox for whichever party is in power. Let D.C. decide what is right for D.C., not some Senator from Kansas who is trying to make a name for himself before the 2008 GOP presidential primary.
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Blogging Against Senator Sam Brownback Since March 2005
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March 9th, 2006 at 9:04 pm
Doesn’t Brownback pay federal income tax based on his salary earned in DC? So, Brownback, while being by a Kansan in terms of residency, but a DC citizen in terms of taxes, would also be paying this flat tax himself (along with the 537 other elected Congressman from other states)? As a taxpayer in DC, perhaps his view is credible in this situtation.
March 10th, 2006 at 8:39 am
The DC flat tax would be imposed at the local level — not the federal level. And, in fact, no Congressmen (or their staff) is subject to this local tax, which is used to fund DC infrastructure from which they indirectly benefit. As a result, neither Brownback or any other Congressmen would be subject to the flat tax.
March 10th, 2006 at 2:54 pm
No source I’ve read has mentioned anything about a “local tax.” You need to explain your comments a little better, Keith. Income taxes have nothing to do with where you live, but only where the income is earned.
“(AP) — Promising new jobs, economic growth and lower taxes, a Republican senator explored ideas Wednesday for testing a flat federal income tax in the District of Columbia.”
March 10th, 2006 at 4:01 pm
I apologize for the previous post; it was a bit hasty. A little research shows that DC has looked into a commuter tax to make up for the money lost by those earning income in DC, but claiming residency elsewhere.
March 13th, 2006 at 4:45 pm
Income taxes depend upon where you live and actually have little to do with where you earn the income. States (and the District of Columbia) cannot exercise unfettered taxing jurisdiction upon individuals. In general, local income taxes are imposed upon individuals based upon residence (i.e., physical presence and physic connection) or abode (i.e., for the itinerant). Thus, for state purposes, the locus of earned income has a incidental effect, if any, upon subjecting one to state income tax. For example, as a DC resident, working in Virginia will not subject me to Virginia tax.
Our federal income tax operates upon a similar proposition, albeit vis-a-vis other countries. To this extent, you are correct that for federal income tax purposes it does not matter where you earn your income, provided that you are otherwise subject to U.S. tax. Thus, the mere locus of earned income has an incidental effect on this. You will be subject to U.S. tax whether you earn it in the United States or earn it in China. I should mention that, for non-resident aliens, the locus of earning income can trigger U.S. tax liability.
Having said this, I should have explained myself better in the first instance. The proposed flat tax is a federal income tax (as you note), but it is only available to those that are residents of DC — at least from what I can tell. This makes it resemble a local tax (i.e., the District of Columbia income tax). I strongly believe that Brownback is not treated as a resident of DC as a Congressman. Thus, my point was simply that he would have no grounds to argue for or against this tax as an individual with a vested interest — which I believe is the basis you suggest.
March 13th, 2006 at 8:10 pm
Well said; thank you for the clarification.
March 14th, 2006 at 9:52 am
Yes, members of Congress are not residents of DC. They are residents of their home states — otherwise they wouldn’t be eligible to represent those those states. So the proposed flat tax would not apply to members of Congress.