A Modest Alternative To Demonizing State Workers
Is it inevitable that greedy teachers, selfish game wardens and effete bus drivers will crush our state budget with their unreasonable demands to be paid a living wage? Perhaps not. An alternative would be to raise the state income tax on the wealthiest Delawareans by 2 percent. In a failed attempt to not sound like a strident hippy, I meekly hinted at this as a possible option during our recent meeting with Governor Markell.
He wasn’t a fan of the idea. Delaware, it seems, is in a bidding war with other states… a bidding war for rich PEOPLE! People like Charlie Copeland and Mike Castle. People who would scurry across the state line to Pennsylvania, or reside in a tax paradise like Texas, rather than face a 2% increase in income tax or a subtle change in the estate tax. That’s the theory anyway. But how grounded in reality is that theory?
At The Nation, Robert Pollin and Jeffrey Thompson address that question:
One charge against raising state taxes in a progressive way is that it will encourage the wealthy to pick up and leave the state. But research on this question shows that this has not happened. We can see why by considering, as a hypothetical example, the consequences of a 2 percent income tax increase on the wealthiest 5 percent of households in Massachusetts. This would mean that these households would now have $359,000 at their disposal after taxes rather than $370,000—hardly enough to affect spending patterns significantly for these households, much less induce them to relocate out of the state. At the same time, a tax increase such as this by itself will generate about $1.6 billion for the state to spend on education, healthcare and public safety.
The bottom line is that whether or not fops like Copeland stay or go has nothing to do with us daring to ask them to “share the pain.” Not only has Greenville not “shared the pain,” Greenville has barely heard about the pain.
(during) the economic expansion and Wall Street bubble years of 2002–07, the average incomes of the richest 1 percent of households rose by about 10 percent per year, more than three times that for all households. The richest 1 percent received fully 65 percent of all household income growth between 2002–07.
…and all that time they were raking in huge tax cuts on dividends, income, and estates. But if they are asked to pitch in a little, they might get huffy and stomp off.
Yes. These guys…
Greenville, is the highest-income ZIP code, and indeed the highest-income census-defined geography, in the entire United States, with a per capita income of over $600,000 per annum.
…might get a widdle sad if we dare to inform them that we are in the midst of a recession.
The $600,000 per annum Greenvillians pay the same tax rate as Delawareans who make $60,001 per year. Delaware is a tax haven that makes the Cayman Islands look like a bunch of amateurs for fuck sake. How much coddling do Delaware’s wealthy really need?
I like Governor Markell, but a budget that seeks to cut expense should seek to increase revenues. I like Governor Markell, but a budget that forces poor and middle class Delawareans to literally pay the price for the vanity wars, the disastrous financial industry deregulation, and reckless tax cuts that got us into this mess is not an ethical budget.
Several years ago, before I came to Delaware, I remember reading an article in The Economist on tax havens and regulatory reform for them. It was primarily about tax havens in offshore places such as the Caymans, but in passing they mentioned Delaware, describing it as “an ‘onshore’ tax haven.” They were not saying it as a good thing.
When you’ve lost The Economist…
Delaware’s rich have long since abandoned their great tradition of noblesse oblige. Nowadays they occupy themselves looking for new ways to chisel money out of the state’s working people.
They have been telling us for 30 years their inordinately low taxes will create jobs. So let’s ask the self-appointed “job creators” to put up or shut up. If the jobs don’t show up, then their taxes get raised. If they don’t like it I will personally help them pack. Maybe they can go to China to live with their money.
Like in the old days when they built their mansions near the Brandywine Valley mills, maybe today then can to to China to live near their factories.
Representing the middle class, let me add my six bits — because that’s about what it is.
Just finished my state return and found that I fall into the bottom of the top bracket.
What would a 2 percent tax hike mean to me? About $42 a year — a little more than 80 cents a week.
In all seriousness, if the state needed an extra 2 percent out of my hide, it sure seems that I could afford it.
And if I can, so can Jack Markell, the members of the General Assembly, the state employees whose salaries top $60K, and, most of all, the folks who live in the 19807 ZIP Code. (Those folks, I’d say, could stand a boost of 3 or 4 percent.)
It doesn’t take much more for us to afford the government we want. Government isn’t free, but it really isn’t that expensive either.
Jason330 wrote The $600,000 per annum Greenvillians pay the same tax rate as Delawareans who make $60,001 per year. Delaware is a tax haven that makes the Cayman Islands look like a bunch of amateurs for fuck sake. How much coddling do Delaware’s wealthy really need?
It should be noted that Greenvillians probably pay less given tax loopholes and such.
http://www.youtube.com/watch?v=KlPQjSWHGO0
I was thinking the same thing Nemski. I’d like to see Greenville’s net state income taxes paid vs. Elsmere’s.
Okay, I’ll provide the most cynical assessment of Gov Markell’s motives in protecting the rich. No one should forget the many Republicans in the Greenville zip codes who changed their party affiliation to register as Democrats in order to vote for him in the Dem gubenatorial primary–a primary he won by a slim margin. I like Gov Markell, but there is no discounting the fact that he owes them.
To be far, the 6.5% income tax is only paid on the income above $60,000, so the person making $60,001 is paying 6.5% on that $1, while the person with an income of $600,000 is paying the top tax bracket on $540,000 of their income. In my opinion, one of the bigger problems with tax disparity is treating investment income differently than salary. This si how the wealthy end up paying less in taxes than their secretaries.
To be fair… That was ironic right? That argument is a red herring, but I agree with you about the wealthier being able to avoid taxes by not doing productive work.
Any of those Wilmington Trust execs who helped destroy the company and who are due those golden parachutes can rest easy knowing that they’ll be taxed at an absurdly-low rate. And…didn’t their malfeasance cost 700 Delawareans their jobs? Too RIch to Tax Equitably (aka ‘TRITE’). These miscreants are going to Disney World!
Oh, and one can only hope that none of the 700 Wilmington Trust employees have kids with SEED scholarships to enable them to go to college. Could be the ol’ double whammy.
But, HEY! The DuPont Company is making an investment in bio-ag, and it MIGHT create 75 jobs, over the next 5 years, maybe in Delaware, and Delaware’s taxpayers are ‘only’ subsidizing this to the tune of $1.6 mill, so all’s right with our engine of economic growth.
The good news is that spring is around the corner, so the Greenville people will be creating jobs for gardeners very soon.
The good news is that spring is around the corner, so the Greenville people will be creating jobs for gardeners very soon.
Si.
The person earning $600,000 in (taxable) income pays $5,400 more than the person who has $60,001 under the last hike. That number can also be lower if calculations are done with married, filing separately etal
That’s $5,400 out of an additional $540,000 in spendable income most likely substantially less than that person was given with the Federal tax cut extensions for the wealthy.
John Kowalko
The person earning $600,000 in (taxable) income
Unless I miss my guess, there aren’t a whole lot of people making wages more than the lowest six digits. Those few would consist mostly of people having a good year, getting one-time bonuses or other windfalls. Once you make more than that on a regular basis, you are advised to take your income in stock or other instruments, where most of your income falls under investment taxes, not regular income taxes.
Oh, and the taxpayers have to ‘invest’ (aka ‘pay extortion’) to get the bleeping DuPont Company to deign to create jobs in Delaware? The same extortionists who created the 19807 Zip with their obscene wealth?
Wonder what Charles ‘Bouvier de Flanders’ Copeland has to say about THAT…
Let’s face it. The game is fixed. Either we accept it, or we try to change the rules.
19803 in the house baby!!!!
suck on that Slower lower
Oh, (sorry, but the ironies just keep on coming), raise your hands if you think that the DuPont Company will have 75 more Delaware employees in 5 years than they have now. Somebody, anybody? What do the folks over at Dissolute Recrimination think?
^ Umm, no.
In a little bit of synchronicity, the news journal editorial board offered their suggestions today. Wait for it…..service cuts! Brilliant!!
Copeland is at home counting the millions he will make from the one printing contract the state gave him. Re: Markell and those republicans who went for him to get him elected…right its pay back. Why do you think he wont even LOOK at other options to deal with the budget. Jack Markell is a businessman and therefore supports all the elites in Greenville and those in Sussex. He has no answers or solutions to the states budget problem and wouldnt consider a 1% state sales tax let alone taxing his rich friends more, hell that could lose him the next election.
Anyone figure out why Carney went ROGUE on the C17 vote with Boner? Didnt take him long to figure out “where his campaign funds” will come from.
Anyone notice the union leaders in this State are absolutely silent? Do they not have a television? Not listen to any news? Why is Delaware still a “right to work state”? The lack of union leadership is clearly the answer. They’ve been bought off too. Sam Latham has to be the absolute worst union leader! Its about time the rank and file dumped his ass on the curb.
Do you have a link for this printing contract? Even if your story checks out, I don’t think much of it. Charlie’s printing business is well run and is just as worthy to compete for state business as any other, maybe even more so.
Printing isn’t a real high margin business anyway. A few million in revenue isn’t that important to Charlie. It is far more important to him that he be able to call himself a businessman. A successful businessman.
It’s doesn’t matter what the issue is, the solution from the left is always the same
higher taxes
more spending
bigger government
more regulation
Correction:
It’s doesn’t matter what the issue is, the solution from the left is always the same
flag burning
higher taxes
union thuggery
late term abortions
more spending
public transportation
gay marriage
ACORN
bigger government
islam
open borders
socialism &
gun control
Do not forget the other leftist excesses:
food for the hungry
medical care for the infirm
heat and electric for those over consuming, always demanding to be comfortable families and seniors
thousands of jobs wasted distributing those needs
tolerating right wing conservative greed focused pols
John Kowalko
JK – Republicans are also for all of those things, as long as the poor pay for it themselves. It is naked social Darwinism.
We know Republicans love the poor, because they made so many of them.
Republicans are also for all of those things, as long as the poor pay for it themselves.
Correction – If the poor begin to accumulate any assets, Republicans will not sleep until they have figured out a way to strip them and keep them for themselves.
Politically raising taxes has been so demonized it is rare to find even top Democratic leaders who are advocating them today. This is what was most disappointing to me about Obama folding before the hand even began on the tax cut debate. Obama had an opportunity to make the case to the country that some tax increases are at some times necessary but he unilaterally surrendered and thereby lent further credence in the public eye to the Republican ideology, or to be more precise, mythology regarding tax cuts.