We have seven legislative days left – we are looking to cut expenses and raise revenue to balance our budget – looking to cut/raise about $400 million. As I have said at my civic association meetings over the last months, I am not supporting any revenue bill that raises personal income tax on the lower and middle class, I support adding two additional tax brackets. Rep. John Kowalko introduced House Bill 109 and it was released from committee. Rep. Kowalko’s bill lowers tax rates slightly on the current 6 tax brackets which include anyone making $125,000 or less and adds two additional brackets – one bracket for folks making more than $125,000 and $250,000. Currently, Delaware’s highest tax bracket is $60,000 – a millionaire pays the same tax rate as someone who is making $60,000 a year, it has been like this for about two decades.
Delaware’s top revenue sources are Personal Income Tax, Corporate Franchise Tax, Abandoned Property, Casinos and Lottery, and Gross Receipt Tax – Delaware needs more reliable revenue. Delaware is one of only five states in the nation with no sales tax and ranked 4th in the nation with the lowest property taxes.
Delaware’s personal income tax highest bracket back in the 70’s was $100,000 and taxed at 19.8%, I had to do a double-take just to make sure I was reading it right. Back in the 70’s we had at one point 17 tax brackets and the brackets were taxed at 1.6% (lowest wage earners) to 19.8% (highest wage earners).
In the late 70’s the highest tax bracket went from $100,000 to $50,000 and then in the 80’s the highest tax bracket went to $40,000. In the mid 90’s the highest tax bracket dropped to $30,000 and then increased to $60,000 in 1999.
A study claims Delaware has nation’s lowest tax burden, click here to read the article.
It makes sense adding two additional brackets to stabilize our revenue and it maintains the quality of the services that make our state such a desirable place to live and retire. Delaware is ranked in the top ten states where millionaires live and we were ranked 3rd for best state to retire a combo of low taxes and a great lifestyle.
June 30th will be here soon, I guess we will see if we will we raise taxes on all or add the two additional tax brackets.