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 $100,000 | Currrent Status -House Revenue & Finance 4/21/23 |
House Sponsors – Baumbach, Longhurst, Minor-Brown, Morrison, Wilson-Anton, Dorsey Walker, Carson, Harris, Heffernan, Johnson, Lambert, Lynn. Moore, Neal, Osienski, Phillips | Senate Sponsors – Townsend, Sturgeon, Gay, Hoffner, Lockman, Sokola |
House Yes Votes – | Senate Yes Votes – |
House No Votes – | Senate No Votes – |
House Absents or Not Voting – | Senate Absent or Not Voting – |
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.
Any update on the progressive tax brackets bill? Will it get a floor vote?