HB233 and HB149 – Republican Tax Cuts

If a Republican doesn’t try to cut taxes for our state’s wealthiest citizens, are they even a Republican?

House Bill 233 is the first step in establishing a flat tax rate for all residents in Delaware. It collapses the current 6 income tax rate brackets into 3.

The current tax bracket configuration is as follows:

• 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.

This is a travesty in and of itself because there is no reason someone making $60k should be paying the same tax rate as someone making $600k or $6M. But Mike Ramone thinks rich people paying taxes at all is a travesty.

So here is his 3 bracket plan:

• 2.0% of taxable income in excess of $2,500, but not in excess of $10,000;
• 4% of taxable income in excess of $10,000, but not in excess of $25,000;
• 5.0% of taxable income in excess of $25,000.

So now if you make $25k, living just above or on the proverty line, you get to pay the same tax rate as someone making $2.5M or $25M.

This giveaway to the wealthy will cost the state $479 million each year. The bill was not released from committee on January 23, 2024.

HB 133 – Republican Flat Tax	Currrent Status – House Revenue & Finance 6/16/23
House Sponsors – Ramone, Collins, Shupe, Smith	Senate Sponsors – Hocker, Wilson
House Yes Votes –	Senate Yes Votes –
House No Votes –	Senate No Votes –
House Absents or Not Voting –	Senate Absent or Not Voting –

House Bill 149 is purports to prevent income ‘bracket creep’ due to inflation, but ignores the fact that as you earn more, you should pay more in taxes. The bill will adjust the dollar amounts for each bracket annually to account for cost of living increases.

Notice how Republicans have couched this in their bill description: “Cost-of-living pay increases are intended to offset inflation and not create a greater tax burden on lower income taxpayers. Social justice requires that lower income taxpayers should not face both inflation and higher tax rates at the same time.”

Social justice also requires higher income taxpayers to pay a higher tax rate than the very same lower income taxpayers.  

The bill was not worked in committee at the end of January.

House Bill 149 – Bracket Creep	Currrent Status – House Revenue & Finance 5/11/23
House Sponsors – Collins, Hilovsky, Ramone, Shupe, 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 –