Under current law, there are seven tax brackets of progressive taxation in Delaware. The highest tax bracket covers all incomes above $60,000, taxing that income at a rate of 6.6%. That is patently absurd. Some one making 6 million is taxed at the same rate as someone making $61,000. It’s like a Republican flat tax paradise. This state needs new and reliable sources of revenue to replace fading or unreliable sources such as casino gaming, unclaimed property and corporate fees. New tax brackets for wealthier individuals can provide that.
HB14 creates the following new tax brackets: 1. At $125,000, with a rate of 7.10%. 2. At $250,000, with a rate of 7.85%. This Act also creates a tiered reduction of the otherwise available itemized deduction based on the individual’s taxable income. HB15 is an alternative, which just adds new tax brackets: at $125,000, with a rate of 7.10% and at $250,000, with a rate of 7.85%. The preferable bill in my mind is the alternative, HB15. Neither bill
provides for tax decreases for the lower tax brackets that encompass the middle class, working class and poor Delawareans as yet. So, the bill that doesn’t reduce itemized deductions is preferable to the one that does.
Where is the bill now? Both bills are in the House Revenue & Finance Committee as of 12/13/18
Democratic Sponsors: HB14: Kowalko, Sokola. HB15: Kowalko, Sokola, Ennis, Bentz, Brady, Lynn
Republican Sponsors: None