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In an effort to increase revenue and address budget deficits, the District of Columbia has announced a series of new tax changes that will affect residents and businesses alike. The changes, which were approved by the D.C. Council earlier this week, come as the city grapples with the economic fallout from the ongoing COVID-19 pandemic.One of the most significant changes is the introduction of a new tax bracket for high-income earners. Individuals who earn over $250,000 annually will now be subject to a higher income tax rate of 8.95%, up from the previous rate of 8.5%. This change is expected to generate an additional $50 million in revenue for the city.Small businesses will also see changes to their tax obligations. The city has announced that it will be raising the gross receipts tax for businesses with annual revenues over $1 million. This tax hike is expected to bring in an estimated $20 million in additional revenue.In addition to these changes, the District of Columbia will be implementing a new tax on digital advertising services. This tax will be levied on companies that derive revenue from digital advertising in the city, with rates varying depending on the size of the company and the amount of revenue generated.Mayor Muriel Bowser has defended the tax changes as necessary measures to address the city's financial challenges. "These changes will ensure that we are able to continue providing essential services to our residents while also investing in our future," Bowser said in a statement.However, not everyone is pleased with the new tax changes. Some business owners have expressed concerns that the tax hikes will put additional strain on their bottom line, especially as they continue to recover from the economic impacts of the pandemic.The new tax changes are set to go into effect on January 1, 2026. The city council has stated that they will continue to monitor the effects of these changes and make adjustments as needed to ensure that the District of Columbia remains financially stable in the years to come.