Councilmember Silverman's Statements on Proposed Estate and Business Tax Cuts
STATEMENT ON PROPOSAL TO CUT THE ESTATE TAX
I add my voice in support of removing the estate tax cut and changing the business tax cut to focus on small businesses. I thank you, Mr. Chairman, for your leadership on the overall tax revision package, which has significantly increased the progressivity of our tax code. Because of these reforms, I think we have one of the most progressive income tax systems in the nation, which is something to be proud of.
However I don’t think that significantly raising our estate tax threshold is compatible with either the goal of increasing progressivity or our goals as a District. The estate tax is the most progressive tax we have. It only affects the wealthiest, and it is an incredibly effective tools for combating income inequality. If you say you want to fight income inequality here in the District, I just don’t know how you can support raising the exemption for the estate tax.
I know people will share anecdotes of residents who have moved right before they died to avoid the estate tax, but notice they don’t share any statistics. That is because all of the data that I’ve seen shows that the District is only getting wealthier. More people are moving to DC, and the estate tax is not pushing them out.
What is making our residents leave? High housing prices and a struggling school system. If you actually want to keep residents here, those are the things we need to be spending money on, not another tax cut for our 100 wealthiest residents.
This cut affects such a small number of people—giving the 100 wealthiest estates in the District at least $80,000 each. Meanwhile, our poorest residents, who are trying to make ends meet on multiple minimum wage jobs, can’t find a child care center that will take our vouchers because they don’t meet market rate. They can’t find affordable housing, because our waiting list for housing vouchers is 40,000 people long.
It is true that our budget is large. Thirteen billion dollars is not a small amount of money, but budgets are about priorities. By keeping the estate tax cut, no matter the size of the budget, you are voting for our 100 wealthiest families—and against our poorest working families.
I was not part of the Tax Revision Commission, and I didn’t vote on the original package. By removing the estate tax cut, we can make the package even more progressive and better for our residents.
I want to thank Councilmember Grosso for his leadership on this issue and for introducing these amendments. I will be voting for them, and I encourage my colleagues to vote for them as well.
Thank you, Mr. Chairman.
STATEMENT ON PROPOSAL TO MAINTAIN TAX CUT FOR SMALL BUSINESS
Thank you, Mr. Chairman and all of my colleagues, for your diligent work so far on the budget. We’ve already accomplished a great deal, including making sure we could modernize West Elementary and Capitol Hill Montessori at Logan, both of which were in severe need of renovation. However there is clearly more that we need to do to make sure we are helping our city grow and thrive.
Thank you, Councilmember Grosso, for this amendment, which I think strikes the appropriate balance of supporting our businesses and working to meet the needs of our low-income residents.
When I first looked at this last series of triggers, I was in favor of keeping the business tax cuts in place. Last year during the debate on paid family leave, I talked to businesses all across the city. Many of them were small businesses—the products of residents who decided to take a risk and who often have the District’s best interests at heart. They not only try to turn a profit but also try to make a difference. And they frequently hire our hardest-to-employ residents, because it’s the right thing to do.
I want the District to continue supporting small businesses with our tax code. Right now, business in the District is booming. The city is doing better than ever, but it can be hard to succeed for our small and local businesses. Rents are high, and it can be challenging to compete for skilled workers.
I don’t think taxes are a major incentive one way or another for our businesses. If a business leaves, it’s not because of our taxes. It’s because they can’t afford our sky-high rents. Our successful small businesses look at the suburbs and see more room to grow, not lower taxes. As the DC Fiscal Policy Institute has pointed out, our taxes taken as a whole are competitive with our neighbors, even before we cut the business tax last year. But if we can help our small businesses, even in a small way, by reducing our business tax for them, then I think we should consider that.
I do believe there needs to be a balance, and I see a lot of unmet needs when I look at the budget. I’m glad to see increases to the per-pupil funding formula, but I read articles showing that our schools are seeing record numbers of teachers leaving. I also see reports that we need to significantly increase our child care vouchers for our low-income residents because they don’t meet the full market rate cost of care. And I see rapidly rising rents but only a small increase in our housing vouchers. The District still has numerous unmet needs, which tells me that we must find a balance between helping our small businesses grow and thrive and helping our low-income residents.
That’s why I’m glad that Councilmember Grosso introduced this amendment. It makes sense to lower our business tax for our small businesses, while using the remaining funds to meet important needs like reducing the cost of child care, providing more affordable housing, and helping our returning citizens. This amendment strikes the balance we need, and I will be voting in favor.
Thank you, Mr. Chairman.