The Unintended Consequences of D.C.'s Transient-Accommodations Tax

(Matt Anderson/iStock/Getty Images Plus)

In late May 2018, I arrived in Washington, D.C., to work at the late, great Weekly Standard through a fantastic program called the National Journalism Center (NJC). It was my first time living in a city and working in a professional setting, and I had only two months to find housing. Instead of searching high and low for a rental in an unfamiliar area, I settled on paying for a dorm at George Washington University (GWU) in Foggy Bottom — a place where many D.C. interns spend their summers because of its convenient location and relative safety.

The price tag for a two-bedroom quad was considerable. In total, my family and I paid $4,305 for eleven weeks of shelter. Most of this was obviously attributable to the price set by GWU. I can’t remember or find the sticker price for summer 2018, but the 2020 rate was $3,600. The other bulk of the full cost we paid was because of Washington, D.C.,’s transient-accommodations tax, which was set at 14.8 percent when I moved into GWU, but has since been raised to 14.95 percent by the D.C. city council. That means that, had the pandemic not hit and GWU hosted the hundreds of interns it normally does, anyone in a quad like the one I lived in would pay nearly $540 more.

Aimed at extracting funds from the hordes of well-off businessmen, politicians, and activists who travel to the nation’s capital every year, the tax is probably thought of by the D.C. council — which consists of 11 Democrats and two independents — as an easy and uncontroversial way to raise revenue from the fat cats staying at the Willard, Hay-Adams, and of course, the Trump International Hotel. No one crammed into a small studio apartment within the city limits feels bad for the visitor paying a punishingly high sales tax while enjoying their stay at a four-star hotel. But what is supposed to be a progressive tax ends up being extremely regressive because it applies to anyone staying in the district for 90 days or less, crushing the budgets of the interns who flood into the city. While professionals must pay the transient-accommodations tax on a five-night stay, interns often have to pay it on two or three months’ rent.

And unlike New York, Los Angeles, Chicago, or Boston, most of the interns who come to D.C. don’t come to the city to work in finance where they earn a sizable stipend or fair hourly rate. They come to work in journalism, activism, Congress, or at a federal agency. These are institutions that can barely pay their full-time employees — look up how much money your congressman’s staff assistant makes sometime — much less interns. Beginning in 2019, Congress began allocating funds to pay its interns, but for a long time, the vast majority of interns were not compensated for their work.

Worse than causing interns who can spend thousands of dollars on rent to operate on shoestring budgets, this tax locks low-income young people out of the internship market. If you’re a political-science major interested in public service after college, D.C. internships provide essential experience that will catch employers’ eyes on a résumé. But not every family can pay $3,000–$4,000 for housing during the summer months on top of college tuition and housing. Especially when their college student could be living at home for free and make more money working a traditional summer job.

Washington, D.C., has the third-highest rent in the country behind San Francisco and New York City, rendering it extremely difficult for interns without any consistent income — and possibly no income at all — to find housing during the summer. The progressive D.C. council, attempting to extract money from rich people staying in swanky D.C. hotels, has made this problem significantly worse. By forcing college students interested in working in the world of governance, journalism, and activism to contribute — and contribute significantly — to the D.C. city budget, the council has ensured that the only ones able to accept these valuable stepping stones toward successful careers in those fields are well-to-do people who can rely on their parents for financial help. I was lucky enough to be one of those people, and that first internship turned out to be more important than I could have possibly imagined. The people I met and skills I learned have helped me secure each successive job I’ve had since then, including this one. To provide the less fortunate with a greater chance of being able to seize similar opportunities, the D.C. council should recognize its error and narrow the scope of its transient-accommodations tax.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *