In 2005, the District of Columbia set up a gross receipts taxA gross receipts tax is a tax applied to a company’s gross sales, without deductions for a firm’s business expenses, like costs of goods sold and compensation. Unlike a sales tax, a gross receipts tax is assessed on businesses and apply to business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding. on larger businesses to pay for the new $611 million Nationals ballpark. The Washington Examiner calculates that the city has collected $135 million in taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es and rent above its payments on the ballpark’s bonds. Rather than reduce the “dedicated” tax, they’re raiding the money for the rest of the budget:
If the gross receipts tax were used to pay down the stadium debt, the ballpark’s bonds could be paid off in nearly half of the 30 years it was supposed to take, [D.C. Council member Jack] Evans said.
Ed Lazere, an analyst at the D.C. Fiscal Policy Institute, said he understood businesses’ anger over the tax, but he said that the recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. means everyone has to chip in.
“It’s reasonable in the middle of an economic downturn to look at every revenue source that we can,” he said.
Councilman David Catania, I-At Large, said, “my hope is we’ll raid this revenue only so long as we need to.”Share