D.C. Mayor Vincent Gray still is unhappy about the city council not passing his proposed tech tax break this fall.
In front of an audience of more than 100 of the region business community's bigwigs on Thursday, he hammered home his belief that the District's economy must grow by attracting people and businesses with a friendlier commercial environment. His bill would have granted investors in startup tech firms a tax discount on their capital gains: The current tax is about 9 percent; Gray was proposing 3 percent.
"What happened was, this argument was made on the council we were somehow going to imperil the future of the economy," he said at the Greater Washington Board of Trade event. "Some of the statements were absolutely ridiculous -- that we were going to imperil the future of school modernization in the District of Columbia if we did this. The reality is we're getting very little money from [the capital gains tax] now... We've got to change the mind-set of the people of the District of Columbia, especially our policy makers as to how we grow this economy."
The D.C. Council stripped that part of Gray's bill and sent the tax break to the city's tax review commission to consider. Gray later said he hopes to get the issue through the commission and before the council again as soon as possible. He said until the city could compete with its surrounding jurisdictions (Virginia has no capital gains tech tax while Maryland's is 5.5 percent), it was at-risk of losing the startups its does have.
"We've had two kinds of tech firms in the District of Columbia," Gray said. "We've had those that struggled and failed, and those that started and succeeded and left."