D.C. Council Approves New Tax Bracket For Higher-Income Earners

WASHINGTON -- In a heated 7-to-6 vote Tuesday afternoon, the District of Columbia Council voted to create a new 8.95 percent top tax bracket for city residents making more than $350,000. Councilmembers Jack Evans (D-Ward 2), David Catania (I-At-Large), Marion Barry (D-Ward 8), Muriel Bowser (D-Ward 4), Vincent Orange (D-At-Large) all voted no, along with D.C. Council Chairman Kwame Brown (D).

What does this mean in dollars in cents? As The Washington Post's Mike DeBonis tweeted following the vote, "If your taxable income is $500K, you'll pay $675 more in D.C. income tax. If $1M income, $2,625 more tax. If $5M income, $20,925 more tax."

Reports the Post:

The vote, a priority of liberal activists, allows the council to delay the imposition of a new tax on out-of-state municipal bonds until early next year. But with the proposal slated to raise $106 million over four years, a vocal minority put up a fierce three-hour fight to block the tax increase. They noted the city’s chief financial officer reported Friday that the District will end fiscal year 2011 with an $89 million surplus.

The new tax rate will go into effect in October when the new fiscal year starts.