citypaper: archives

The D.C. Tax-Free Zone
Why should you have to pay taxes when the District's multimillion-dollar nonprofits don't?

Cover Story

The exodus of middle-income residents from the District may go down as the last great migration of the 20th century. Citing deplorable municipal services, rising crime, and an ineffectual educational system, these former D.C. stalwarts have become D.C. haters.

Almost to a one, the departing hordes complain about the District's confiscatory taxes—income, property, and sales—which make Washingtonians' tax bills among the highest in the land.

But while the polis-sustaining taxpayers escape to Northern Virginia and the Maryland suburbs, a parasite burrows deeper into the District's flesh: the multitude of nonprofit, tax-exempt organizations.

Nonprofit churches, institutions, and charities have flocked to the city and are growing like kudzu. Drawn by the District's liberal policies, the nonprofits have taken millions of dollars of taxable property off the Department of Finance and Revenue's (DFR) rolls. And while residents and businesses have endured the sting of the hike in the sales tax from 6 to 7 percent, the nonprofits have remained immune. They are exempt from sales tax on nearly everything they purchase—pencils, carpets, trucks, and more.

Taxpaying citizens must jump through fiery hoops to secure building permits for backyard decks, but churches are given building permits and zoning waivers for their expansion almost as a matter of right.

All the while, the burgeoning nonprofits are consuming basic services that cost billions to maintain: police and fire protection, the courts, the transportation infrastructure, just to mention the big-ticket items.... Continued

Issue of Dec. 2 - 8, 1994

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