Earnestly American
DC Budget Simulator
DC faces a "Fiscal Cliff" with projected spending likely to exceed revenues. This tool lets you change policies to close the gap and see how your choices impact Washingtonians.
Earnestly American
DC faces a "Fiscal Cliff" with projected spending likely to exceed revenues. This tool lets you change policies to close the gap and see how your choices impact Washingtonians.
Taxes are grouped by category. Open a group to change its rates, start from a real proposal or city, or pick options. Each group's line shows what your choices in it raise (+) or cost (−) in FY2028 and over FY2028-FY2030. Every number is static: it assumes no one changes behavior, the way DC's Chief Financial Officer scores tax bills. Estimated avoidance is shown separately at the end. Every policy, tax or spending, is scored as if it takes full effect on Oct. 1, 2027, so options are compared on the same footing; real start dates would vary. Options marked Tax break come from the District's own catalog of tax breaks. Options that overlap can't be combined: picking one clears the other.
Income tax is figured in two steps. First a deduction comes off income: the standard deduction or itemized deductions. The brackets then apply to what is left, taxable income. So the 4% bracket covers the first $10,000 after the deduction, and every filer with taxable income pays it, from a waiter to a millionaire. The Earned Income Tax Credit is figured after this and is not changed by the brackets.
Tax year 2025 amounts under D.C. Act 26-416, adjusted for inflation each year after. The standard deduction only affects filers who don't itemize: anyone who itemizes on their federal return must also itemize on their DC return (D.C. Code § 47-1803.04(b)).
| Taxable income over | Rate (%) |
|---|
Brackets above $1 million are scored on an estimate. The Chief Financial Officer publishes one group for all filers over $1 million (3,048 filers averaging about $2.96 million of income in tax year 2022). How that income spreads above $1 million is my assumption (a standard Pareto curve fitted to those two figures), which puts about 1,200 filers above $2 million, 300 above $5 million and 100 above $10 million.
Capital gains, dividends, interest and rents. Today DC taxes them like wages, under the same brackets. Most of this income goes to the highest-income households, and it swings with the stock market.
The investment income surtax and the 13% capital gains rate tax much of the same income, so you can use one or the other: setting one clears the other.
Each class of property has a land rate and a building rate, in dollars per $100 of assessed value. Today they are equal.
Applies to homes, apartments and commercial property; vacant and blighted rates stay as they are. The table shows the resulting rates and what each class pays.
Edit any land or building rate in the table.
Taxing land more and buildings less is a land value tax: it rewards building on valuable land and puts more of the tax on location, which owners did not create and cannot move. Commercial rates apply to a building's whole value based on its tier. How each change falls on rowhouses, condos, apartments and commercial buildings is shown under "Land, buildings and housing" below.
To avoid counting the same tax twice, change the home and apartment rates in the table or pick one of the proposals for expensive homes and second homes below, not both. Picking one of those proposals resets the home and apartment rates to today's; changing those rates clears the proposal.
Current law raises the general rate from 6% to 7% on Oct. 1, 2027, the start of FY2028, so 7% is the starting point here; setting it back to 6% is a tax cut. One point is worth about $146M a year (the Chief Financial Officer's estimate of the one-year delay, grown with the forecast). Chairman Mendelson's hearing draft keeps the 7% increase.
Three options below (following federal expensing rules, turning the unincorporated business exemption into a credit, raising the minimum tax) were estimated at today's 8.25% rate. If you change the rate here, their effects are scaled up or down in proportion.
Your tax changes and your spending changes, split across DC's income groups the way the Institute on Taxation and Economic Policy (ITEP) and the Congressional Budget Office do it: each tax by who ends up bearing it, each program by who receives it, valued at what it costs the city.
Taxes a resident household pays directly: income tax (state and local), property tax on a home or the estimated share built into rent, sales and meals taxes on typical spending, and vehicle taxes. Taxes businesses pay (corporate income, commercial property) are not assigned to households.