Do You Pay DC Taxes? Guess Who Doesn't?
The World Bank and the IMF!
DC's unique tax and revenue situation:
The tax base has an unusually high proportion of low-income
taxpayers.
Even with this constricted tax base, DC must provide services
provided by city, county, and state governments
such as state courts, driver licensure, liquor control,
unemployment compensation, food and drug inspection, health
care, professional licensure and designation of development
zones.
In DC, the individual income tax burden is substantially
higher than the average of cities that levy income taxes.
Property taxes in DC are substantially lower than most cities.
In DC, the regressive tax system places a heavier burden
on lower-income people. As the "Tax Parity Act"
is phased in, the tax system in DC will become even more
regressive.
Part of DCās response to its budgetary constraints has
been reducing services to low-income residents. One case
is the recent closing of DC General Hospital. This policy
mirrors World Bank and International Monetary Fund (IMF)
austerity policies imposed on Africa, Asia, Latin America
and the Caribbean.
What do the World Bank and IMF do?
Both the World Bank and the IMF operate in a highly secretive
matter where substantive decisions are not open to public
scrutiny÷of either citizens in the countries that make funds
available, or of citizens in countries that are supposed
to benefit÷until well after they have taken effect, if at
all. The two institutions also have largely failed in their
stated goals.
In most of a group of 83 poor countries that have received
substantial IMF financing between1978 and 1997, unemployment
increased, real wages fell, income distribution became
more unequal, poverty rose, food production per capita
declined, external debt grew, and social expenditures
were cut during those years.
60 percent of World Bank projects have not only
failed, but by increasing the debt burden of the countries
that received loans from the Bank to carry out those projects,
and also, in some cases, because they have caused environmental
damage, they have been losses in development terms.
IMF and World Bank: 100% Tax Exempt!
By executive order, the IMF and World Bank are covered
by the International Organizations Immunities Act. As such:
the IMF and World Bank do not pay any taxes on their
combined yearly profits of $2 billion,
the IMF and World Bank do not pay taxes on their property
in DC, which has a combined value of over $800 million,
the IMF and World Bank also do not pay sales
taxes.
What do the IMF and World Bank own?
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Address
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Value
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Annual Unpaid Taxes (Est.)
|
|
2121 Pennsylvania Avenue NW (IFC)
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$ 317,196,540
|
$ 6,185,332
|
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1818 H Street NW (IBRD)
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$ 216,223,700
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$ 4,216,362
|
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700 19th Street NW (IMF)
|
$ 106,546,600
|
$ 2,077,658
|
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600 19th Street NW (IBRD)
|
$ 102,746,200
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$ 2,003,550
|
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1816 I Street NW (IBRD)
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$ 78,686,664
|
$ 1,534,389
|
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701 18th Street NW (IBRD)
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$ 39,555,860
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$ 771,339
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What do the IMF and World Bank owe?
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Estimated annual unpaid Corporate Income Tax
|
World Bank: $ 31,252,620
|
|
at current rate of 9.975%
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IMF: $ 9,275,035
|
| |
|
|
Estimated annual unpaid Property Taxes at current
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World Bank: $ 14,710,972
|
|
Class IV rate of $1.95 tax for each $100 in value
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IMF: $ 2,077,658
|
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Total: $ 57,314,075
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Based on 1999 tax rates and collected revenues the World
Bank and IMFās unpaid taxes total nearly 3% of all property
taxes, 22% of all corporate franchise taxes,
and 2% of all taxes collected in a given year. If
even just their property were owned by a taxpaying organization,
that organizationās taxes would exceed the cost to the city
of the services that organization benefited from: it would
be a net contributor. In contrast, the World Bank and IMF
are only a drain on city funds.
What are Payments In Lieu of Taxes (PILOTs)?
Payments In Lieu Of Taxes (PILOTs) are voluntary payments
made by tax-exempt organization to the localities (cities
and counties) in which they own property-- often to the
general tax fund. While some organizations make payments
to prevent their tax-exempt status from being challenged
by localities strapped for cash, most make the payments
because they understand the relatively high importance of
property taxes to local revenue.
Who makes PILOTs?
The Federal Government paid over $100 million in 1998
for National Park Service, U.S. Fish and Wildlife Service,
and the U.S. Forest Service lands to 2,327 local governments,
and since then payments have increased.
The Massachusetts Port Authority, a tax-exempt state
agency, makes large payments (totaling $10 million in
2000) to the city of Boston.
The Massachusetts Institute of Technology (MIT) has been
making payments to the city of Cambridge since 1928.
In light of DCās existing tax situation -- a heavy tax
burden on low-income residents in a city so swamped with
debt it is cutting services to those same citizens -- good
citizenship is necessary. It is unquestionable the IMF and
World Bank can pay: together they make over$2 billion
in profits annually, and the IMF has approximately $30 billion
in gold reserves.
What would PILOTs mean to the city?
$57 million dollars paid by the IMF and World Bank each
year to the DC government would make a huge difference to
the city and its residents. It could help alleviate DCās
crushing debt burden, which costs DC taxpayers $254,396,000
each year, or cover 35% of DC General Hospitalās annual
cost to the city. Every year, this uncollected tax bill
could pay for:
the Local Street Maintenance Fund,
the salaries of over 250 new teachers,
the salaries and benefits of all DMV employees combined.
TAKE ACTION!
Call elected officials who can create the
political will to force the IMF and World Bank
to pay their fair share!
EVERYONE: Call the Members of Congress in charge of Committees
on DC issues:
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