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.