Governments continue to target upper-income taxpayers, with the District of Columbia the latest to increase tax rates. On Tuesday, the DC City Council created a new tax bracket for DC taxpayers with income over $350,000. These taxpayers will see their tax rate over that amount go from 8.5% to 8.95%, effective October 1st of this year. Mayor Vincent Gray is expected to sign the legislation.
The rush to increase the tax rate is an attempt to raise revenue to make up for a decision to delay the effective date of the city’s income tax on earnings from out-of-state municipal bonds from January 1, 2011 to January 1, 2012.
For more information about how these increases may affect your tax situation, please contact your Aronson Tax Services Group representative at 301.231.6200.