Hello everyone,
A number of tax cut proposals have been introduced in the Delaware General Assembly.
The odds are good that most of the measures – for the most part, introduced by Republicans – will languish in committee.
To date, a grab bag of bills has been introduced that appeal to various constituencies.
One would add to the tax break enjoyed by senior citizens. Others would cut the gross receipts tax (a sales tax on businesses), reduce the real estate transfer tax, trim the corporate income tax rate by 30% and reduce the personal income tax rate by 10%.
All of the above measures have their merits but would have a limited impact unless all were passed at once.
Democrats will argue that the current $800 million to $1 billion surplus that could absorb the cuts is mainly a one-time Covid-related windfall.
There is also the issue of inflation which may not be a temporary phenomenon during a period of global conflict and the “sugar rush” of stimulus spending.
The simplest approach would be reducing the 6.6% top state personal tax rate that kicks in at a modest $60,000 a year and leaves many families and singles in the top bracket.
Tweaks are possible, including keeping the rate at 6.6 for those making $125,000 or so a year and dropping other brackets accordingly.
Such a proposal has little chance of passage but would be a great conversation starter. Moreover, it would be a win-win for Democrats who say they champion working families and Republicans who could boast that they voted for a tax cut. – Doug Rainey, chief content officer.
