HOMAGE TO CATANIA
FORMAN, ERIC
HOMAGE TO CATANIA by Eric Forman By any lights D.C. seemed like the last place in America where taxes would be cut. Along with high crime rates, poor services, and a dysfunctional educational...
...In any case, something had to be done...
...By the time the Tax Parity Act of 1999 was introduced on "tax day," April 15, it already had the support of the council...
...IN THE END, THE DISTRICT OF COLUMBIA'S $300 MILLION A YEAR TAX CUT PASSED UNANIMOUSLY, WITH THE MAYORS SUPPORT...
...Along with high crime rates, poor services, and a dysfunctional educational system, the District of Columbia has a poverty rate that, if it were a state, would be the second worst in the nation...
...The income tax rate for all groups would be lowered by one percentage point a year for the next three years, reducing the top marginal rate from 9.5 percent to 6.5 percent...
...His strategy was novel...
...Unwilling to believe that lowering taxes can increase revenue, critics worried the tax cuts would force cutbacks in services or generate deficits...
...According to Catania, the District spends a whopping $13,500 per student each year on education...
...Others argued that the surpluses should be used to combat the city's social problems...
...With its surplus, Catania and Evans reasoned, the District could lower income and property taxes to the levels found in Maryland and Northern Virginia...
...Taxes on businesses and rental and commercial properties would also be reduced substantially to become more competitive...
...After three years, District taxpayers would be saving $420 million a year, with individuals enjoying 56 percent of the benefits...
...And their timing was excellent...
...In January 1998, the Republican council member at large, just a month into his term, began asking residents how they wanted the city's surplus to be spent...
...Although Evans and Catania had enough votes to block a threatened mayoral veto, they could not overcome the opposition of the Financial Control Board, a presidentially appointed oversight commission created by Congress in 1995...
...From comment cards distributed at his public appearances, Catania discovered that, lo and behold, many residents of D.C., where 80 percent of registered voters are Democrats, wanted the surplus to be used for personal and business tax reductions...
...residents had begun to realize it...
...And, as Grover Norquist, president of Americans for Tax Reform, said, the tax cut is "substantial compared to any city's" and a "tremendous step forward" for the District...
...During the same period, the District has lost nearly a third of its population...
...That clearly is not the case, and D.C...
...Nonetheless, it is the largest cut in District history...
...Evans knows a thing or two about winning...
...In Virginia," Catania says, "you have good services at a good price...
...Most important, it seems the District is growing a conscience...
...At the same time that Catania was canvassing residents on what to do with the surplus, he was approaching council members about a tax cut...
...Several members were running in the Democratic mayoral primary and viewed tax cuts as politically risky...
...This final package will eventually save taxpayers about $300 million a year...
...This would be a 50 percent reduction for people making under $10,000 a year and a 32 percent reduction for everyone making over $20,000...
...Fortunately, none of this stopped David Catania from aggressively pursuing a tax cut...
...The resulting legislation, which passed unanimously with the mayor's support, reduces marginal rates by a smaller percentage and stretches the time for implementation from three to five years...
...But with only 2 Republicans on the 13-member city council, Catania had his work cut out for him...
...Whereas the original plan cut the marginal rate for the poorest residents by 50 percent over three years, the new plan only cuts it by 33 percent over five years...
...And despite years of mismanagement and corruption under Marion Barry, the District's answer to practically every problem has been increased spending...
...instead of crisscrossing the country, President Clinton could have just taken a walk around the District for his recent "poor tour...
...Eric Forman is a senior at Duke University, where he is publisher of the Duke Review...
...And 20 percent of the city's $5.3 billion budget is spent on public welfare...
...Their response was lukewarm...
...Together, Evans and Catania put together an extensive package of information showing the District could afford the tax cuts...
...The local head of the AFL-CIO, Joslyn N. Williams, said the package was "unacceptable because it is not targeted at those residents who need it most—the working poor and middle-income households...
...Catania and Evans began courting their respective allies on the council and were able to pick up seven additional votes...
...In response to the charge that the "rich" would enjoy a disproportionate share of the savings, the highest tax bracket will be raised gradually from $20,000 to $40,000...
...In Maryland you have okay services at an okay price...
...Yet somehow the Washington Post judges this plan fairer than the original, which allegedly had "serious distributional defects...
...But all of this carping overlooked the basic injustice of paying high taxes for terrible services...
...So they decided to compromise and were able to build a broad consensus for a more moderate tax cut...
...The Washington Post wrote that the "tax-slashing plan" was "too much too soon...
...Since 1960, D.C.'s tax rates have nearly doubled...
...At a certain point, says Catania, it's just immoral "to pick a person's pocket in the name of government and give him nothing for it...
...The council, which for years has been viewed as politically impotent, was looking for an opportunity to impose its will on the new mayor, Anthony Williams...
...This would at least slow the flight of residents, if not lure people and businesses back...
...And in the District you have terrible services at an expensive price...
...Although the council approved the proposal by 10-2, the mayor, the Financial Control Board, and the Washington Post's editorial board, all immediately criticized it...
...In the words of council member Carol Schwartz, "If high taxes meant good services, we should have the best services in the country...
...After Jack Evans, a moderate Democrat with close ties to business, lost that primary, the cautious pol suddenly became more receptive...
...The role of maverick suits Catania, who is perhaps most famous as the council's first openly gay member...
...This was a good alliance for Catania...
...While campaigning in 1991 for a seat on the council, Evans visited gay bars in Dupont Circle, the district he hoped to represent, leading many to believe that he was gay, an impression the now-married politician did nothing to dispel...
Vol. 4 • August 1999 • No. 45
