I suppose I should be grateful that the DC Council is so solicitous of my economic well-being, but I’m not.
Councilmembers have used us seniors to justify changes in the tax code that will, for sure, benefit some of us.
And barring some unforeseeable development, a majority will again approve them when the Council takes its final vote on the Budget Support Act next week.
But not all of us need tax relief. And the Council is forfeiting revenues that could otherwise have helped residents in true need.
Councilmember (and Mayor-hopeful) Muriel Bowser highlights all she did for us seniors in shaping the District’s Fiscal Year 2014 budget.
The tax measures she cites will help some of us pay for essentials like food, housing, transportation and out-of-pocket medical expenses — apparently a bigger-ticket item for many of us than for more youthful residents.
But if we need tax relief to afford such essentials, it’s because we’re part of the District’s low-income population. I’m not. And I see no reason why I should get favorable tax treatment just because I’ve managed to live a long time.
In fact, the tax code changes aren’t only for seniors, though sponsors chose to call one of them the “Age-in-Place and Equitable Senior Citizen Real Property Tax Act.” For low-income seniors, it surely isn’t.
The act amends a long-standing law that provides a 50% property tax reduction for homeowners over 65 and those with severe disabilities.
It’s one of those bills the Council passed, but couldn’t fund until the Chief Financial Officer projected higher revenues for the upcoming fiscal year.
The act makes some useful, fairly technical changes — among them one that will protect beneficiaries from overdue property tax notices they couldn’t have anticipated.
But it also raises the ceiling for claiming the property tax deduction from $100,000 to $125,000, with subsequent increases to keep pace with inflation.
This is barely less than twice the median income for all District households. And more than 80% of senior-headed households in the District have, according to testimony by the DC Fiscal Policy Institute.
At the same time, the Council will repeal the deferred tax on interest from bonds issued by non-District government entities — the so-called out-of-state bond tax.
The reason, Bowser says, is that it “unfairly targeted seniors.” And she’s not the only one using us as poster children for a tax cut that mainly benefits well-off residents.
When the Council narrowly decided to make the tax permanent, Councilmember Jack Evans objected because “retired seniors on fixed incomes … relied on the District” to give them a unique free ride for earnings on investments that benefit other jurisdictions.
Since then, DCFPI has analyzed the income of households that benefit from the tax giveaway.
More than 75% of the tax-exempt interest goes to those with incomes of at least $200,000 — above and beyond the interest itself. More than 43% of it further enriches households earning, on average, $2 million.
Now, there are some households with incomes under $50,000 that benefit from the tax break, but only some 480 of them are retirees.
They could, of course, change their investment portfolios. The about-to-be-repealed law gave them time to do this. Or as DCFPI suggests, the Council could have narrowly-tailored the tax break to them.
The fact that it didn’t shows that it wasn’t really concerned about impoverishing lower-income retirees.
Placating some upset, very comfortably-situated constituents is more like it. Price tag for soothing them is somewhere around $1.7 million for the upcoming fiscal year alone.
In short, the Council is giving up tax revenues to satisfy interests that have little or nothing to do with those of seniors near the margin of economic security.
Developments on Capitol Hill suggest it’s going to need those revenues merely to sustain current funding levels for a wide range of vital services.
And it’s using us seniors to justify this imprudence, even though it knows (or should know) that it’s putting those who rely on safety net programs at unnecessary risk — seniors included.
Not that we’re all safely netted now, mind you.