WASHINGTON - As the debate over federal tax reform intensifies here, members of Washington's officialdom could find themselves as test cases for one reform proposal: a flat federal income tax. Senator Brownback, a Republican of Kansas, is looking to introduce legislation that would make Washington a "laboratory" for testing a flat tax's merits, and will hold hearings early next year to explore the issue.
"I'm excited about it," Mr. Brownback told The New York Sun in a phone interview earlier this week. Mr. Brownback said that making D.C. a test case would, with limited potential for negative impact, provide valuable data about the effects of a flat tax that would prove helpful in determining whether it should be applied nationwide.
Opponents of a flat tax argue that it disadvantages the poor and reduces revenue streams, while supporters argue that it spurs increased economic activity that causes governments' tax coffers to swell.
Mr. Brownback is chairman of the Senate's subcommittee on the District of Columbia, part of the Appropriations Committee, responsible for funding the federal enclave. Observers yesterday likened using D.C. as a trial run for a flat tax to a school-voucher program currently under way in the District, approved by Congress in 2004. The voucher program is meant both to help Washington's failing school system and to provide hard data on a hotly disputed national issue.
Of the flat tax, Mr. Brownback said: "We're going to hold some hearings about what that might look like, and the District we can use as a laboratory."
According to a member of Mr. Brownback's staff, flat-tax legislation would apply only to the federal income taxes paid by residents of the District of Columbia, which has a population of about 500,000. The District would continue to determine its local income-tax structure, which has three brackets. The highest, which applies to residents earning more than $30,000 a year, is taxed at 9%.
The Brownback staffer said that the flat tax, like the current progressive tax code, would not burden impoverished District residents with a federal income tax bill.
Of the questions the senator hopes the program, and the hearings investigating it, will answer are what changes in market behavior are spurred by a flat tax.
"Would it change charitable contributions?" the staffer said. "We'd also look at whether it would have any effect on the housing market."
In terms of housing, Mr. Brownback's flat-tax proposal might also help restore some of the District of Columbia's middle class, which has been steadily fleeing for more affordable and tax friendly Virginia and Maryland.
The flat-tax legislation, the Brownback staffer said, would probably have to be approved on a year-to-year basis by the Appropriations Committee. Getting initial approval, the staffer said, would likely spark a political battle.
The Democratic mayor of the District of Columbia, Anthony Williams, said in an e-mailed statement: "Leaving aside the merits of this proposal, we continue to resist any efforts on the part of any member of Congress to impose rules and regulations on the people of the District."
A spokesman for Senator Landrieu, the ranking member of the D.C. subcommittee and a Democrat of Louisiana, Adam Sharp, declined to give a specific comment on the proposal. "A key question" for Mrs. Landrieu, Mr. Sharp said, would be the flat tax's net effect on revenue for the District.
The Brownback staffer said that since the legislation would affect only the federal income tax paid by District residents, it would not diminish the District's revenue, as Washington would continue to be funded federally at the same level.
The legislation would also require the approval of the Senate Finance Committee, which oversees federal tax matters. The committee's chairman, Senator Grassley, a Republican of Iowa, declined to comment yesterday.
An economist at the Heritage Foundation, Daniel Mitchell, said the flattening of the federal tax code in Washington would result in the District's being unintentionally "flooded with tax revenue" at the local level.
The city, Mr. Mitchell said, would witness "a big uptick in business, and big increase in its tax base, with more people working and more people earning a higher income." The increased tax base in Washington formed by incentives under the federal flat tax, Mr. Mitchell said, would also inflate the number of people paying local D.C. taxes.
According to statistics and ratings compiled by the Washington-based Tax Foundation, the district's business climate currently ranks as the poorest in the nation owing to its oppressive tax burden.
Mr. Mitchell noted that the legislation might face legal challenges under the equal protection clause of the 14th Amendment, saying opponents might charge that it amounted to geographic discrimination.
Staff for Mr. Grassley, too, expressed doubts about the proposal's political future, saying a similar proposal had been floated by a former senator, Connie Mack, a Republican of Florida, who recently chaired President Bush's federal tax-reform panel. That proposal, an aide said, "never gained any steam."
According to the Brownback staffer, the hearings on the District's flat tax will probably be held early in February, and are likely to include testimony from tax experts from the American Enterprise Institute and other think tanks.