David Schwartzman: Confronting DC’s racial wealth and income gap in this crisis

“Economic gap between black, white Americans may help explain protests” — that was the print headline for a recent Washington Post article by Eli Rosenberg. Earlier, The Post had an important editorial pointing to the need for national policymakers to consider the worsening racial wealth gap in developing responses to the ongoing pandemic and its economic fallout. Recognition of the significance of wealth and income disparity on a national level is a welcome development.

But when will the Post’s editorial board apply this advice to the huge wealth and income gap in DC? I can’t remember any editorial in years calling for hiking the taxes on our most affluent residents to decrease our wealth and income gap. As a result of trickle-down austerity budgets of the last two decades, racial and economic disparities remain shockingly high in the District. Income and wealth inequality has driven big racial gaps in life expectancy, poverty (especially child poverty), and homelessness. 

Mayor Muriel Bowser’s proposed budget does not come close to addressing these disparities, which have only deepened in this crisis — yet there are untapped revenue sources because of the big tax cuts for wealthy residents in recent years. The city ought to raise its DC income tax rates and borrow now against these projected revenues for fiscal year 2021. 

Those earning over $350,000 will get a Trump federal tax cut this year worth a cumulative $400 million, and many DC millionaires will get still more thanks to the CARES Act. A significant DC tax hike for the wealthy would leave these taxpayers paying the same federal-plus-DC income taxes as they did before the Trump tax law was implemented. And please don’t fall back on the claim that the very wealthy will move out of DC if their tax rates go up by a few percentage points: The top 5% in California pay 12.4% of their family income in state taxes, while in DC they pay 9.5%. Similarly, even though the top 5% in Virginia have long paid a lower overall rate of state taxes than the top 5% in DC, the rich in DC have not moved en masse to Virginia.

In a column last week, New York Times columnist Paul Krugman eloquently provides national context: “The core story of U.S. politics over the past four decades is that wealthy elites weaponized white racism to gain political power, which they used to pursue policies that enriched the already wealthy at workers’ expense. Until Trump’s rise it was possible — barely — for people to deny this reality with a straight face. At this point, however, it requires willful blindness not to see what’s going on. I still see occasional news reports that describe Trump as a ‘populist.’ But Trump’s economic policies have been the opposite of populist: They have been relentlessly plutocratic, centered largely on a successful effort to ram through huge tax cuts for corporations and the rich, and a so far unsuccessful attempt to take health insurance away from poor and working-class families.”

In my analysis of DC’s budget shortfall, I point to the reality of institutional racism in DC and call it out as a persistent and pervasive regime of white supremacy in service to big developers, bankers and the corporate sector. 

Hence, as a long-standing member of the Fair Budget Coalition, the DC Statehood Green Party enthusiastically signed on to the coalition’s latest group letter — “DC Council Must Put Bolder Revenue Options on the Table to Balance the Budget and Build for a #JustRecoveryDC.”

So I ask our mayor and DC Council: Why are those most affluent in our community pampered while low-income people continue to suffer? Will you act now for a just recovery? 

David Schwartzman chairs the DC Statehood Green Party’s Political Policy and Action Committee and is the party’s representative to the Fair Budget Coalition.

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