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Arlington County is Only No. 2

Each year, the Chief Financial Officer of the District or Columbia produces a revenue report that compares tax rates and tax burdens of Washington, D.C. metropolitan area jurisdictions. A separate report comparing the District and the largest city of each state is also produced simultaneously.

In brief, the report provides hypothetical tax burdens for a family of three at five income levels -- $25,000. $50,000, $75,000, $100,000, and $150,000 for the District of Columbia, Montgomery County, Prince George's County, Alexandria, Arlington County and Fairfax County. In Part I of the report, used for the analysis below, only four major taxes are analyzed -- income, real estate, sales and use, and automobile. Part II of the report expands the comparison, and analyzes such other taxes as the cigarette tax, financial institution taxes, and motor vehicle fuel taxes.

A synopsis of each jurisdiction's rankings follow (Data is for calendar year 2011; report issued September 2012. See table 2, page 11):

  • Prince George's County: ranked #5 at the $25,000 income level, but ranked #1 at the other four income levels. The "combined ranking" for all five income levels was 1.8, which gave it a #1 "combined ranking" for its tax burden.
  • Arlington County: ranked #1 at the $25,000 income level, #4 at $50,000, #2 at $75,000, and #3 at the $100,000 and $150,000 income levels. The "combined ranking" was 2.6.
  • Montgomery County: ranked #2 at $100,000 and $150,000, and #3 or higher at the other three levels. The "combined ranking" was 3.2.
  • City of Alexandria: ranked #2 at the $25,000 income level, #3 at $50,000 with the remaining income levels ranked #4 or higher. The "combined ranking" for all five income levels was 3.8.
  • Fairfax County: ranked #2 at the $50,000 income level with the other income levels ranked #4 or higher, including #6 at the $25,000 income level. The "combined ranking" was 4.2.
  • District of Columbia: ranked #3 at $25,000 income level with all other income levels ranked #6. The "overall ranking" for all five income levels was 5.4.

We look forward to reporting the calendar year 2012 when it is expected to be released in September. The report's executive summary includes the warning that there is "no single 'best' way of measuring tax burden," and the "study is not intended to measure the overall level of taxation in a jurisdiction; rather, it attempts to measure a hypothetical tax burden for a family given assumptions identified for each tax. "The methodology used to derive the estimated tax burden" for each tax is available in the report. Also makes you think that District officials should think twice before again advocating a commuter tax.

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