And by D.C., I do not mean Wor-Shing-Tun, but the colonial territory of the District of Columbia.
Because D.C. is a colonial territory and not a sovereign state, Congress has the ability to alter or reject D.C. legislation, and Congressional Republicans did so last week, by overturning D.C.’s attempt to decouple our taxes from federal taxes:
The move also would have a major impact on D.C.’s budget, delaying as much as $400 million in anticipated tax revenue for D.C. Additionally, D.C. would have to cut about $600 million from the city’s budget over the next four years, potentially affecting programs related to child care and low-income tax credits.
When Congress passed Trump’s One Big Beautiful Bill Act, the legislation affected local tax laws. Several states and D.C. decoupled, choosing not to implement some of those provisions.
But Republicans moved legislation to block D.C. from doing that. Democrats have pushed back…
In a letter to Congress, D.C. Chief Financial Officer Glen Lee warned the District “would need to suspend the current filing season” to update tax forms and guidance, a process that would take months.
Bowser and Mendelson sent a letter explaining, “Disapproval at this stage would create huge administrative challenges, require taxpayers to re-file their taxes, render existing guidance and forms obsolete, and necessitate rapid mid-year changes to tax administration systems. It is unclear how quickly commercial tax preparation software could be updated to accommodate such changes, and District residents and businesses would likely experience confusion, as well as delays.”
Some more detail here (boldface mine):
Late last year, the council passed a law decoupling the city’s tax code from 13 provisions of the federal tax code that were changed by Trump’s One Big Beautiful Bill, the massive tax-cut package approved by Congress. The move stopped some of the tax cuts — those exempting some tips and overtime work from taxation — from applying under the local tax code, which officials said would have cost an estimated $600 million in lost revenue over four years.
Instead, the council repurposed some of that revenue to expand the city’s match for the Earned-Income Tax Credit and to create a new Child Tax Credit, a decision that advocates say could benefit moderate- and low-income residents and families in the city.
The council’s decision to decouple wasn’t an outlier; at least a dozen states have similarly done so, but only in D.C. can Congress overrule such decisions. (Virginia and Maryland are among the states that chose to decouple.)
The problem is Republicans might have violated federal law (shocking!):
Earlier in the day, Council Chairman Phil Mendelson contested whether or not Congress had acted in time, posting a document on the council’s website indicating that the 30-day period that Congress had to repeal the bill had actually ended on Wednesday night — before the Senate voted. (Every bill passed by the council heads to Congress for a 30-day review, or 60 days if it involves changes to the city’s criminal code.)
According to Mendelson’s office, the bill was sent to Congress on December 30, thus kicking off the 30-day review period — which would have ended on February 11. But the bill didn’t appear in the official congressional record until January 7, when some congressional officials say the actual 30-day countdown begins.
While this is being phrased as a clash between Congressional Republicans and the D.C. territorial government, there’s another party that potentially can be involved: the colonial subjects of D.C. It remains to be seen if any private citizens, such as those who would have received additional EITC funds but now will not, would be willing to sue the federal government for violating the law. In other words, it doesn’t matter what the Council, Congress, or the mayor want, private citizens get a say too, making this even more of a clusterfuck.
D.C. statehood now (and that does not happen, unless Democratic senators, when Democrats regain power, abolish the filibuster).
mikethemadbiologist