Biggest, subtle issue about race in this country...
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One alternative would be to prohibit any person from having a 'voting domicile' in the District of Columbia, preserving the territory as the seat of government. Each person who does maintain a home in the District could declare a residence in another state. Every state would be required to recognize as a resident any person who showed a DC address, and every person would need to file for state income tax in their state of choice, as well as receive state benefits there such as drivers license, unemployment insurance, etc.
DC residents, by the way, in addition to being taxed without representation, are required to purchase a non-resident hunting or fishing license to take game outside the city of Washington, and to pay non-resident tuition fees to attend a college outside the city of Washington. This is a further burden that is unfair.
The idea of the "District of Columbia", as I understand it, was that no state would be favored by being the "seat of government", and would somehow have a "home field advantage". I'm sure this could be argued many ways, but think of how it would be if the Federal Government were headquartered in Texas---or New York---or (gasp) Idaho. Thetre would be obvious "grumbling" about favoritism, etc.
As far as the "taxation without repsresentation", it's true; and it's a justfiable 'gripe'. I don't know how this could be handled without making the District into a state---at which point it would lose its special 'neutral' status, as stated above...
As far as the 'racial' angle, I have serious doubts about that. The fact is that the District is, for all practical purposes, a large urban area, with no real 'back country' or rural component---and like ALL large Eastern US cities, it DOES have a large black majority (which could be called in our PC world, "a minority majority") This says more about the dynamics of our urban areas than anything about the special 'racism' suffered by District residents. Big cities, in the American east, within their city limits today, are essentially "black" cities....and if the City Limits are also the District limits, then of course you have a "black" district.
I was surprised in DC to see that even the license plates have the slogan "Taxation Without Representation". It's a controversial issue for sure...