And congressional prohibitions essentially act as a tax shield for the city's lucrative and politically influential law, lobbying and accounting firms. It's a problem, I acknowledge that. But a new gross receipts tax is not the answer. A gross receipts tax amounts to a levy on all the money taken in by a business each year. Nor can the city tax its hometown industry, the U.S. government.
Federal properties are tax-exempt.
The Brookings study recommended that the federal government give the city an annual payment in lieu of taxes. Fiscal analysts caution that the nation's buoyant economy has fattened the city's coffers and disguised these underlying problems. But as candidates promise tax breaks and talk of spending more on schools, welfare reform and capital repairs, some discern a disconnect between election year rhetoric and fiscal reality. Revenue reform is the last step in a restructuring of the city. But that hasn't happened yet.