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HB 128 – Progressive Reform of the State Income Tax Brackets

Each year over the last ten, State Representative John Kowalko would introduce a bill that would bring some progressive fairness to our supposedly progressive income tax rate scale. Yet, how progressive and fair can our rates be here in Delaware when someone making $60,001 is paying the same tax rate as someone making $600,000 and someone making $6 million a year.

Here is our current income tax rate structure:

  • 2.2% of taxable income in excess of $2,000 but not in excess of $5,000;
  • 3.9% of taxable income in excess of $5,000 but not in excess of $10,000;
  • 4.8% of taxable income in excess of $10,000 but not in excess of $20,000;
  • 5.2% of taxable income in excess of $20,000 but not in excess of $25,000;
  • 5.55% of taxable income in excess of $25,000 but not in excess of $60,000; and
  • 6.6% of taxable income in excess of $60,000.

Another Newark lawmaker, Representative Paul Baumbach, has introduced House Bill 128, which would create a new top threshold of greater than $100,000, taxing it at 6.9%. It would also lower rates on amounts of no more than $10,000. Here would be the new tax structure:

  • 0% of taxable income less than $2,000.
  • 1.9% of taxable income in excess of $2,000, but not in excess of $5,000.
  • 3.9% of taxable income in excess of $5,000, but not in excess of $10,000.
  • 4.8% of taxable income in excess of $10,000, but not in excess of $25,000 .
  • 5.55% of taxable income in excess of $25,000, but not in excess of $60,000 .
  • 6.6% of taxable income in excess of $60,000, but not in excess of $100,000 .
  • 6.9% of taxable income in excess of $100,000.

I would add two more brackets of 7.1% for incomes over $250,000 and 7.5% for incomes over $500k. But that’s just me.

The bill has the House Minority Leader, Mike Ramone, as a cosponsor, along with a solid mix of progressive legislators and members of the House and Senate leadership. An interesting coalition. And perhaps a sign of this bill’s future success?

House Bill 128 – Introducing a New Tax Bracket for Incomes over $100,000Currrent Status -House Revenue & Finance 4/21/23
House SponsorsBaumbach, Longhurst, Minor-Brown, Morrison, Wilson-Anton, Dorsey Walker, Carson, Harris, Heffernan, Johnson, Lambert, Lynn. Moore, Neal, Osienski, Phillips Senate SponsorsTownsend, Sturgeon, Gay, Hoffner, Lockman, Sokola
House Yes VotesSenate Yes Votes
House No VotesSenate No Votes
House Absents or Not VotingSenate Absent or Not Voting

Delaware politics from a liberal, progressive and Democratic perspective. Keep Delaware Blue.

2 comments on “HB 128 – Progressive Reform of the State Income Tax Brackets

  1. What additional services should we expect to see from this increase ?

    What impact do we expect to see on people moving to Delaware.

    Don’t we already have one of the highest State tax brackets in the country ?

    Don’t we already have a State budget surplus of almost 1 Billion Dollars.

  2. Any update on the progressive tax brackets bill? Will it get a floor vote?

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