Taxes

"These Are Taxes that the District of Columbia Deserves to Get"

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a taxable hotel. also suitable for burglary.

That's D.C. city councilman Michael Brown on a proposed $10 million tax grab. The District wants to snag some additional revenue from tourists visiting the city by extracting tax on the retail price of hotel reservations rather than the wholesale price paid by companies like Travelocity. The tax rate on hotel rooms in D.C. is already a whopping 14.5 percent, they're just looking to increase the size of the base.

According to the Washington Examiner, hospitality industry groups are none too thrilled. Increasing taxes is a great way to scare tourists right out of the city. And even though industry groups love to bitch and moan, they're right: D.C. happens to be conveniently surrounded by two other perfectly nice states. Folks arriving at Ronald Reagan Washington National Airport must drive through a massive and convenient hotel district called Crystal City, which happens to be in Virginia. Those hotels are three miles and a couple of metro stops from the museums and monuments of the National Mall.

Most online booking sites list prices with the taxes included these days, so D.C. isn't pulling anything over on buyers by increasing the tax. It just means the rooms will show as more expensive than their suburban counterparts in a search.

More on the joys and idiocy of taxing travel to encourage travel at the federal level here. More on leaving D.C. to get stuff done in Virginia here.

NEXT: The Permanent State Bailout

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  1. You mean you won’t get twice as much revenue from doubling tax rates? And here I thought people were like livestock, eagerly submitting to the shear and blade.

  2. Sorry KMW, but image FAIL. The Watergate Hotel has been closed for nearly 4 years.

    1. You don’t think that will stop the tax collectors, do you? They’re pretty creative fellows, in a low criminal sort of way.

      1. link fail

  3. Never underestimate the ability of the District to screw over its own businesses. Our clowns councilmembers live for this sort of thing.

  4. Wow. So I guess we should start calculating sales tax on everything based on the original MSRP.

  5. If tourists are going to eschew our hotels for cheaper ones, then we’ll just have to tax the visitors who do book stays in the district that much more.

    1. I think that’s actually what’s going through their heads.

  6. Yet one more reason why I will never visit that swamp.

  7. Where’s the crack at?

  8. When I think about what DC deserves to get, I don’t generally come up with “more of my money.” Funny, that.

  9. Does anyone have any data on the elasticity of demand for hotels in DC? Is the author’s implicit conclusion that DC is on the wrong side of the Laffer curve empirically correct? As a DC resident, I am all for taxing non-residents maximally but only to the extent that we wring as much money out of them as legally possible.

  10. D.C. happens to be conveniently surrounded by two other perfectly nice states

    Minor quibble, but D.C. isn’t a state. Yet.

  11. I love my little fix of DC politics I get from H&R. It never fails to make me glad I left the area.

  12. People like Dellis serve as a good reminder that democracy is simply a tyranny of the majority.

  13. Well, having been a resident of both of the states that surround the District, I would argue that there isn’t all that much to recommend either. And, for those that think that 14.5% is outrageous, remember that over half of the property in DC is federal reservation, and thus exempt from property tax. Oh, and most private employees in the District pay state and local taxes elsewhwere. If there is a more viable income source for them, I am sure they’re all ears.

  14. I agree with Michael Brown, partly because of the budget problems. No one
    seems to factor in the high cost of Metro fares from the suburbs to downtown, not to mention the inconvenience(have you taken Metro lately?)My friends and family from all around the country have said they would rather pay a little more tax to avoid those problems and costs. Dusti Ridge

  15. Deserve’s got nothin’ to do with it.

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