House Bill 64, the bill to end the Delaware Republican Flat Tax that forces people making $60,000 a year to pay the same exact income tax rate as rich people making $600,000 or $6 million, was killed in committee yesterday by Democratic State Representatives Krista Griffith and Gerald Brady. They joined all the Republican members of the committee to vote the bill down. Shockingly, State Representative Andria Bennett, who killed this bill and betrayed her colleagues back in 2018, voted to advance the bill. Maybe she learned the lesson that Mrs. Griffith and Mr. Brady are about to learn: don’t piss off the base and defend Republican policies at the same time.
Rep. Griffith defended her vote at the 12th RD Meeting last night, saying that a tax increase is not necessary right now because we not only have a budget surplus, but we have tons of federal money coming in due to President Biden’s American Rescue Act. If she had just left it at that, this might be a passable defense of her vote. A temporary defense. But a legitimate one.
But she didn’t leave it that.
She then said she was worried about raising taxes on the rich and having them leave the state. She also thought the proposed rates in House Bill 64 were too high. Oh, those poor wealthy people. When will they get a break? Thanks, Krista, for buying into Republican talking points.
Rep. Griffith said she does want to make our income tax rates more equitable and more progressive, as opposed to just being a Republican Flat Tax as they are now.
Indeed. So we all will look forward to Rep. Griffith introducing her Progressive Income Tax Rate Reform bill any day now. The longer she goes without introducing her own Reform bill, the more we will know that she didn’t mean a word of that.
Here are the current tax brackets:
| Tax Bracket | Tax Rate |
|---|---|
| $2,000+ | 2.2% |
| $5,000+ | 3.9% |
| $10,000+ | 4.8% |
| $20,000+ | 5.2% |
| $25,000+ | 5.55% |
| $60,000+ | 6.6% |
That’s a Flat Income Tax masquerading as a Progressive Income Tax. For a Democratic elected official to defend this is disgraceful. House Bill 64 creates the following new tax brackets: at $125,000, with a rate of 7.10%, at $250,000, with a rate of 7.85%, and at $500,000, with a rate of 8.6%. Here is that in chart form like above:
| Tax Bracket | Tax Rate |
|---|---|
| $2,000.00+ | 2.2% |
| $5,000.00+ | 3.9% |
| $10,000.00+ | 4.8% |
| $20,000.00+ | 5.2% |
| $25,000.00+ | 5.55% |
| $60,000.00+ | 6.6% |
| $125,000.00+ | 7.1% |
| $250,000.00+ | 7.85% |
| $500,000.00+ | 8.6% |
Only about 5% of Delaware residents would be impacted by this change. Ninety-five percent will not see a difference. The new rates will affect only the top 1-2% of wage earners in the state. But that 1-2% will finally be paying their fairer share of income tax.
Here are the bill details:
| HB 64 Sponsors | Yes Votes | No Votes |
| Kowalko, Morrison, Wilson-Anton, Baumbach, Bentz, Osienski, K.Williams | ||
| Pinkney, Sokola, Ennis, S.McBride | ||
| Current Status — Killed in House Revenue & Finance Committee as of 3/25/21 |
“An income tax structure that has graduated rates for lower incomes but a flat tax for all top-earners is, to be blunt, only half-built. Rightfully, we tax the first $60,000 earned at lower rates, which increase step-by-step,” said Sen. Marie Pinkney, the lead Senate sponsor of HB 64. “But the final step – 6.6% for all income $60,000 and above – should be the middle of the ladder, not the end. Other states and the federal government recognize this and have brackets for incomes up to the millions. That makes sense, not just because it’s fair but because it is built to last. As inequality grows and wealth is moved from bottom to top, our tax policy should change with the times. This bill helps us do that and I am proud to be on as a Senate sponsor.”
“Fundamentally, this legislation is built around fairness and stability. It has been decades since we last meaningfully updated the structure of this tax – one of Delaware’s most stable, important sources of revenue – and we cannot keep waiting while inflation and rising income inequality gradually shift the burden further down the income ladder,” said Senate President Pro Tempore David Sokola, a lead sponsor of the bill. “This bill levels the playing field and better prepares us for our state’s long-term future. It’s fair and straightforward and I look forward to working with our partners in the House to get it passed this year.”
I look forward to riding a bit west up Silverside Rd and dropping lit and planting signs in the summer of ’22. What a terrible vote and she lifted her defense right off Fox! The question now is will she double down and kill minimum wage? the Chamber of Commerce is ecstatic!
To be fair, Rep. Griffith did say the Minimum Wage bill will get out of committee and get a vote on the floor, and she seemed supportive, but I don’t recall if she explicitly said she was for it. She also said she will vote yes on HB 150 (Marijuana).
I’ll believe it when Bill Bush gavels the minimum wage vote in committee. The damage of her vote yesterday is deep.
She did not say anything about the surplus during the committee hearing. Mike Ramone and several other republicans did, but I was on that zoom and that wasn’t bright up by her specifically. Her other reasons were, and the idea that businesses wouldn’t locate here if we did this, which doesn’t make a lot of sense considering we have a separate tax system for large corporations.
This vote neatly reveals who Krista Griffith and Gerald Brady believe their constituents to be. It is that simple.
Brady sees his entire constituency when he shaves in the morning. Griffith appears to serve the State Chamber.
FYI Here’s are interesting real state tax burden comparisons, unlike Secretary Geisenberger’s speculative and unproven conjecture that he provided at yesterday’s Revenue/Finance Committee hearing
Representative
John Kowalko
https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416
States with the Highest & Lowest Tax Rates
*Assumes “Median U.S. Household” has an annual income of $63,218 (mean third quintile U.S. income); owns a home valued at $217,500 (median U.S. home value); owns a car valued at $24,970 (the highest-selling car of 2020); and spends annually an amount equal to the spending of a household earning the median U.S. income.
wallethub.com
This is really stupid. Ironically, the Blue state of Illinois is among the few states with a flat tax and if you follow their economic tribulations, they have been and are in a world of hurt and as a result, steadily losing population, constantly having budget crises and fighting to forestall deficits; Example, they have periods where they cannot pay employee health insurance premiums, causing healthcare providers to demand up front payment by their state employee patients.
The time to get more equity in tax structures is when you don’t need the money. Because when you do need the money, these same folks are going to tell you they can’t afford to pay their fair share. I’ve lived (and paid taxes) in MD and MN and Delawareans do not know from high taxes. One thing that is true is that places that can invest in themselves thrive. And here we regularly in the business of underfunding our children, underfunding our environment, underfunding transportation — all key QoL indicators. We can find all of the money in the world to do beach replenishment in Sussex, but will fight over making sure that our children are well educated and cared for.