The economic crisis has forced state and local governments throughout the country to review their increasingly stressed budgets and seek new sources of revenue.
In December, the District's unemployment rate hit 8.
8 percent, compared with the national rate of 7.
2 percent, a 16-year high.
Personal income taxes provide the city with 17 percent of its revenue, its largest single revenue source.
By contrast, corporate and franchise taxes are projected to make up just 4.
3 percent of the District's revenue in 2009.
In considering its own stimulus package, the D.
C.
Council should review the structural impediments to job growth in the District.
How can the District position itself to take advantage of the enormous opportunities presented by the federal government's role as the world's largest financial shareholder and general contractor since the New Deal? For-profit corporations are painfully absent from the District's economic landscape.
At 9.
975 percent, the District has the third-highest state or local corporate tax rate in the country.
For a company considering operating in the District, it's an absolute deal-breaker.
Economists have noted for years the phenomenon that higher tax rates often result in lower tax revenue.
The District's corporate tax policies have the same impact on its economic growth and diversification that NINA ("No Irish Need Apply") signs had on the unemployed Irish in the 1900s: Don't bother operating a business in the District.
Our tax rates will make sure you're not competitive.
The D.
C.
Council would be wise to consider the expanded role of the U.
S.
government in managing the largest economy in the world, and what that role could mean to the District.
The stimulus package now before Congress will dwarf those of the New Deal.
And it's likely to attract institutions and corporations from around the world that want to participate in the massive spending involved.
The Tax Foundation, a nonpartisan policy research group, consistently rates neighboring Virginia as having one of the most favorable corporate tax environments in the nation.
(The District and Maryland are consistently among the worst.
) Tysons Corner has plenty of capacity to handle the expected influx of businesses wanting to do business with the U.
S.
government, and Virginia is ready to accommodate them and their jobs.
Eliminating the D.
C.
corporate income tax could have a profound impact on the future of the city.
Job growth, increasing property assessments and revitalization throughout the city would be immediate.
The economic crisis and the role the federal government is expected to play in the country's recovery present the District with opportunities that no other city in the country has.
Think Dubai; it has oil.
The District has the federal government.
The District's tax structure, especially its corporate tax, prevents it from assuming a position of economic leadership in the region and the country.
Markets are mobile, and businesses will locate where they have the greatest economic advantage.
The District needs an economic advantage.
The national crisis needs a deliberate, quick and bold response.
If the District doesn't act soon, it may as well post signs on all major roads into the city: No Corporations Need Apply.