Kowalko, Henry propose income tax hike for those making $125,000 or more a year

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A state senator and state representative have introduced legislation calling for two additional tax brackets for those earning more than $125,000 a year.

The legislation was introduced by Rep. John Kowalko, D-Newark and State Sen. Margaret Rose Henry, D-Wilmington.

This bill creates a new tax bracket at $125,000 with a rate of 7.10 percent, and an additional bracket of $250,000 and up with a rate of 7.85 percent.

The top rate is currently 6.6 percent for incomes of $60,000 or more.

The state’s income tax is high in comparison to many states, especially in a region with a higher cost of living that helps boost many incomes well beyond $60,000.

For example, Pennsylvania has a 3 percent income tax rate, although local income taxes can raise that percentage by 1 percent or more.

Offsetting Delaware’s higher income taxes are low property taxes and no sales tax.

Kowalko has long advocated higher taxes for wealthier Delawareans.

Critics have claimed that any gains from the higher taxes would be offset by wealthier residents leaving Delaware and taking up residence in low or no income tax states.

A hearing on the bill is slated for Wednesday. (See bill below).

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