Let’s start out by acknowledging the work that is being done, this new tax bill, HB 240, is a step in the right direction. Adding an extra tax bracket, while creating a new tax arrangement that will be able to pass through both parties in the general assembly at a time like this, is not an easy task. Most of us on the left believe that we should be focusing our efforts on helping middle and lower income families succeed, and not doing anything that will cause any sort of increased burden on those families. It would follow that most of us then believe that the upper income brackets should contribute more because they have the means to do so without disrupting their ability to survive and thrive. Whereas, lower income families cannot afford to pay an extra $40 or $50 a month and still afford to pay their debts and have enough left-over to survive, let alone thrive. One of the biggest issues with Carney’s initial “Shared Sacrifice” was in the lack of “Sacrifice” for the top income earners. Without adding extra brackets, there was a higher percentage of sacrifice concentrated at the middle-class. This new proposal, while still increasing taxes on the middle-class, does add that higher bracket, and puts a much heavier burden on the shoulders of those who can bare it.
Let’s take a look at the numbers:
Now let’s take a look at some of the possibilities of that very upper bracket, just so we have some perspective there. If you make $250k a year as an individual, you will pay an extra $650 a year on top of what you already pay. If you are a single millionaire (making 1,000,000) you will pay an additional $3,272 a year on top of what you already paid. If you are a multimillionaire making $5,000,000 (such as the President of Wilmington University) a year you will pay an extra $20,772 on top of what you already paid. So, for us in the middle level of earnings, paying an extra $4-$10 dollars a month isn’t an extreme ask, but those at the top will likely feel the pinch (but that’s likely all it will be to them, a pinch).
All this being said, there is still time to make amendments, to call your reps and voice your opinions, to ask for a lower increase in one of the brackets, or even to just get more information on the projected revenue from these numbers. However, if you want to voice your opinion, now is the time to do so.
There are other revenue streams we can push to help offset some lower income tax rate increases. Proposals such as those made by the Civic League for New Castle County that dealt with a lightering fee to raise revenue. Or the Marijuana Legalization and Taxation bill, HB 110, that would raise a projected $25 million once implemented. Or another proposal that deals with a “Soda” or “Sugar Tax,” which, in states that have implemented such a tax, has lowered healthcare costs and raised revenue. However, all of these will take time to implement and will not likely get us out of the immediate crunch, but would help us not end up in this situation again in the future. Other proposals coming down the line which include legislation that would increase in the tobacco tax (SB 67), upping the price per pack by $1 and adding taxes to other “tobacco related products,” which would generate an estimated $18.6 million. For now, there is still a deficit to deal with this year, and that means that there are still likely going to be some level of cuts to certain programs. If there are redundancies or programs that are no longer used, but still draining the coffers, then let’s work together to work that out. That being said, if your goal is to cut health services for the poor and elderly, cut education and afterschool programs, or the arts, we will be fighting back every step of the way.