When you first hear that the DC wants to stop paying federal taxes, you might feel as if they’re looking for a free ride. The truth is many DC residents are more interested in having a say in American politics. In other words, the residents pay taxes, as much as $6,500 per person, yet aren’t represented in elections. Thus, they feel it’s unfair to continue paying federal taxes. Still one question remains, should DC residents be exempt from federal income taxes.
Why End Taxes in DC?
As stated above, it’s only fair for DC residents to be exempt as they have no representation. As the constitution states, “No taxation without representation.” While this movement had a lot of momentum in the past, many residents would rather have representation and continue to pay taxes. Unfortunately, it’s not that easy.
The Pros of Such a Solution
Passing a law that makes DC residents exempt from federal income taxes would be much easier than giving representation. By giving DC residents representation, it would throw the delicate balance out of whack, some feel that it would even be unconstitutional. In other words, allowing residents to live in a tax-free area would prevent a legal battle among the states. However, it’s not that easy. There are a number of setbacks to making DC exempt from taxes.
The Obvious Setbacks
One of the major setbacks is the amount of money that the country would lose from DC residents. DC residents pay $3.9 billion in federal income taxes. Losing this amount could be devastating to America. Many residents in DC pay an average of $6,500 in taxes, which is double the national average. Another setback is that the area could become a haven for those that want to avoid paying federal income taxes. Because DC is easier for people to access than the Cayman Islands, the area could soon become overpopulated and would naturally lead to billions of dollars going untaxed.
There doesn’t seem to be a real answer. DC residents no longer care as much about being exempt from federal income taxes, but they do care about representation. Unfortunately, offering representation would create legal turmoil and may not be constitutional. This means that the area may never see a change to the current situation. It’s easy to see that both options are riddled with problems. Making DC residents exempt from taxes would put a financial strain on America and could cause the area to become a tax-free haven for the rich. This may be just one of the reasons why many who work in DC commute to the area.
Did you file an extension on your own taxes this year? No matter where you live, you can find more information here on tax forms, extension, and more.
