On a yearly basis the Internal Revenue Service (IRS) adjusts more than 60 tax provisions for inflation to prevent what is called “bracket creep.” Bracket creep occurs when people are pushed into higher income tax brackets or have reduced value from credits and deductions due to inflation, instead of any increase in real income. Many states already fully or partially adjust their income tax brackets for inflation. Delaware is not one of them:
House Bill 149, which is sponsored by only Republicans so far, would require personal income tax brackets to be annually adjusted for cost-of-living increases.
Cost-of-living pay increases are intended to offset inflation and not create a greater tax burden on lower income taxpayers. This Act will be effective for tax years beginning after December 31, 2023.
I am curious if there is a catch, since it is a Republican bill. It seems to be straight-forward and not inherently evil, which is unusual for a Republican bill. It is currently awaiting a hearing in the House Revenue & Finance Committee.
| HOUSE BILL 149 – PREVENTING INCOME TAX BRACKET CREEP DUE TO COST OF LIVING INCREASES | Currrent Status – House Revenue & Finance 5/11/23 |
| House Sponsors – Collins, Hilovsky, Ramone, Smith, Yearick | Senate Sponsors – Hocker, Richardson, Lawson, Wilson |
| House Yes Votes – | Senate Yes Votes – |
| House No Votes – | Senate No Votes – |
| House Absents or Not Voting – | Senate Absent or Not Voting – |
You should do your homework. Delaware’s Income tax brackets have not been adjusted since 1999. Prices have increased by over 505 since then. Failure to adjust tax brackets for inflation is particularly harmful to low income households. Your comments tend to suggest that you put party above reason and the very constituents you claim to represent.