Current:Home > MyBill offering income tax relief to Delaware residents fails to clear Democrat-led House committee-DB Wealth Institute B2 Expert Reviews
Bill offering income tax relief to Delaware residents fails to clear Democrat-led House committee
View Date:2024-12-23 16:23:37
DOVER, Del. (AP) — A GOP proposal offering income tax relief to all Delaware residents failed to clear a Democrat-led committee in the state House on Tuesday.
The bill failed to win enough votes in the House Revenue and Finance Committee to be sent to the full House for consideration.
The measure, sponsored by House Minority Leader Michael Ramone of Newark, raises the minimum income subject to state income tax from $2,000 to $2,500. It also replaces the current six personal income tax brackets with three new brackets.
The current tax brackets range from 2.2% for taxable income of $5,000 or less to 6.6% for taxable income of $60,000 or more. Republicans are proposing tax brackets of 2% for income of $10,000 or less, 4% for income between $10,001 and $25,000, and 5% for income over $25,000.
Under the proposal, a person with taxable income of $25,000 would see tax savings of 25%, while one with income of $50,000 would see a tax cut of 16%. A person with $1 million in taxable income would pay 24% less than under the current structure.
Analysts estimate the proposal would cost the state general fund about $190 million in its first year of implementation, and $479 million in the following full fiscal year.
“What concerns me is the revenue loss…. What happens when we lose this money?” said Rep. Kendra Johnson, a New Castle Democrat.
Ramone explained that the proposal could provide an economic stimulus, benefitting those most in need while helping offset the tax loss to the state. He urged the panel to release the bill, but acknowledged it will have to be modified to have a chance to pass the legislature.
Ramone also said he would not push for a floor vote unless revenue forecasts indicate that sufficient funds are available. “It’s just a starting point,” he said, noting that the state has seen substantial revenue surpluses in recent years, largely due to an influx of federal funds.
Rebecca Goldsmith, deputy finance secretary for Gov. John Carney, said the bill comes with “a high cost,” noting that personal income tax is the largest single revenue source for the general fund.
“Reductions to this tax without an alternative revenue offset could leave the state with significant budget shortfalls now and into the foreseeable future,” she said.
Republicans also have introduced a bill requiring state income tax brackets to be adjusted annually for inflation, by an amount equal to the change in the Consumer Price Index over the preceding year.
The measure, which is opposed by the Carney administration, is intended to protect taxpayers from “bracket creep,” when cost-of-living increases to wages and salaries push people into higher tax brackets, with no increase in real income.
“If it’s just inflation causing that, then you’re not making anything,” said bill sponsor Rep. Rich Collins of Millsboro. “All that extra money is just the inflation, and you get to pay taxes on it.”
Analysts currently estimate that the proposal would cost the general fund about $30 million in fiscal years 2025 and 2026, and about $38 million fiscal 2027.
The committee deferred further discussion and action on Collins’ bill until it reconvenes in March.
veryGood! (55)
Related
- Lady Gaga Joins Wednesday Season 2 With Jenna Ortega, So Prepare to Have a Monster Ball
- Giuliani to lose 2nd attorney in Georgia, leaving him without local legal team
- 'Only Murders in the Building' renewed for Season 4 on Hulu: Here's what to know
- Fears about Amazon and Microsoft cloud computing dominance trigger UK probe
- Detroit-area police win appeal over liability in death of woman in custody
- AP, theGrio join forces on race and democracy panel discussion, as 2024 election nears
- A 53-year-old swam the entire length of the Hudson River as part of his life's work: The mission isn't complete
- Correction: Oilfield Stock Scheme story
- Kim Kardashian and Kourtney Kardashian Team Up for SKIMS Collab With Dolce & Gabbana After Feud
- A man charged with voter fraud in Florida blames rivalry between Trump and DeSantis supporters
Ranking
- Man who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison
- Why is the stock market down? Dow drops as Treasury yields near highest level since 2007
- FedEx plane crash lands after possible landing gear failure at Tennessee airport
- Kenyan opposition lawmakers say the Haiti peacekeeping mission must be approved by parliament
- Patrick Mahomes Breaks Silence on Frustrating Robbery Amid Ongoing Investigation
- With an audacious title and Bowen Yang playing God, ‘Dicks: The Musical’ dares to be gonzo
- Biden’s dog Commander no longer at White House after biting incidents
- Only 19 Latinos in Baseball Hall of Fame? That number has been climbing, will keep rising
Recommendation
-
Atmospheric river to bring heavy snow, rain to Northwest this week
-
Bachelor Nation's Colton Underwood and Becca Tilley Praise Gabby Windey After She Comes Out
-
From cradle to casket, life for Italians changes as Catholic faith loses relevance
-
Patriots trade for familiar face in J.C. Jackson after CB flops with Chargers
-
Forget the bathroom. When renovating a home, a good roof is a no-brainer, experts say.
-
Shooting at mall in Thailand's capital Bangkok leaves at least 2 dead, 14-year-old suspect held
-
Meet this year’s MacArthur ‘genius grant’ recipients, including a hula master and the poet laureate
-
Charges dropped against 'Sound of Freedom' crowd investor: 'There was no kidnapping'