When Governor Markell ran away from Velda Jones-Potter during the Democratic Treasurer Primary, he didn’t stop running until he hit Rhode Island. There, he paused long enough to turn over $500,000 of Democrat Governors Association money to the Democrat Gubernatorial candidate and hold a press conference — which is where he was called to the carpet.
Reporter Katherine Gregg of the Providence Journal actually asked some pertinent and tough questions of Governor Markell. Maybe the reporter could do a guest stint in Delaware? The whole article can be found here.
It seems that at the press conference our Governor attacked the Democratic candidate’s opponent for proposing a $320 million tax increase to close a budget gap. But didn’t Governor Markell propose and support a $200 million in tax increase in Delaware asked Ms. Gregg? According to Markell:
The revenue increases that you talk about, first of all they were all sunset …. They will be going away … and most of that is going to have no effect on the people of Delaware [because] $130 million of that is on companies that incorporate in Delaware.
Oh… Those tax increases will be going away… Golly, I feel so much better now. Of course the gross receipts tax, a temporary tax put in place in the 1970′s, is going away, too. Sunset provisions are just as easy to remove as changing the tax rate. This “sunset” ruse is a difference without meaning. A simple majority vote from each legislative chamber along with a Gubernatorial signature is all that is required to raise/lower taxes or remove sunsets.
How about those companies that just “incorporate in Delaware”? How many of those companies incorporating in Delaware will start to move their incorporation elsewhere as a result of Delaware’s repeated fee increases over the last 6 years? A simple check of incorporation statistics from a handful of other State’s shows that Delaware’s competitiveness is slipping, and the Democrats Dodd-Frank bill has increased the slope.
The Governor went on:
“There was an increase [in] the income tax,” he acknowledged, “but at the highest level.”
The highest level? Absolutely true. A 17% income tax increase was applied to anyone earning $60,000 or more. That would be working families, teachers, fire fighters, retirees, etc. Those high earners! Shame on them for wanting to keep their money rather than let the Governor and his Legislative cronies spend it…
But then comes the big whopper…
83 percent of the people in our state are untouched by our proposed tax increase… a very different situation [from Rhode Island].
According to the Bureau of Labor Statistics, in 2008 Delaware’s median household income was $58,380. Which means that almost 1/2 of Delaware’s households were affected by the income tax increase. Now, maybe the Governor is playing cute since the quote above says “proposed” not “passed”. Perhaps the Governor’s “proposals” only affected 17%, but the Governor signed a bill that actually directly taxes almost 50%. Hmmm…
After the news conference, the Democrat Governors Association was incensed that anyone had the audacity to question Governor Markell’s hypocrisy:
DGA spokeswoman Emily Bittner denounced questions posed to Markell about his own tax moves as a sign of reporter bias, and said: “The percent sales [tax] on groceries, medicine, clothes is very different than what he [Markell] did. You know that …. Let’s start with the cigarette tax. You don’t have to buy cigarettes to live. You do have to buy groceries.”
Reminded that Markell sought increases in the gross-receipts taxes paid by grocery stores and other retailers, contractors, manufacturers and “occupations requiring licenses,” she said: “It’s not a direct tax on consumers. It’s completely different.”
So, now we know what counts as intelligence at the DGA. To them, increasing costs on businesses does not increase costs on consumers. Gosh, fundamental microeconomics simply rewritten with the utterance of “political authority”.
And you wonder why voters are frustrated, angry & scared?
C’mon Charlie, you’re leaving out two important parts of the conversation, which conveniently makes your argument stronger. You cite that in 2008, Delaware’s median household income was $58,380. I’m not disputing that. However, two factual points deflate your argument and ring true to what Markell said (only 17% are affected by this):
1) In Delaware, households can file their income taxes married but separate, which means that a husband and wife can EACH have income up to $60,000 and not be impacted by the tax increase. So a household could have income well over $100,000 and not be impacted by this increase.
If I’m not mistaken, I believe that most married couples file their state taxes married but separately for this exact reason. So you could almost rewrite it to read “individuals making more than $60,000,” not households. Big difference.
2) The increase affects individuals making more than $60,000 of *taxable* income (see the bill synopsis). So if you have deductions, which most people who make $60K a year do) I was able to do it when I made less than half that amount), then you can take a larger salary and push it under the threshold.
Those two facts (and they are facts, not debatable points) defuse your “half of Delawareans pay more taxes” argument. We can haggle whether it’s exactly 17%, but it’s nowhere near your cited 50%.
First, let us recognize that you agree with me that the Governor was stating falsely when claiming only 17%. Now it is a debate over the size of his misstatement.
You claim, with no supporting documentation, that most Delaware filers file separately. I don’t know that to be true, although Delaware does allow joint federal filers to filing separately in state. However, your analysis misses the fact that Delaware has a very high divorce rate and higher percentage of “older households” — both of which tend to be single filer households.
So, I’ll accept your position that it is somewhere between 17% & 50%. Let’s pick around the mid-point, say 30%. That means that the Governor was off by almost 100%. Still a whopper.
This is the best column that Charlie has written. The two responders above miss the most important point of Charlie’s column — the doublespeak of polititians — for instance, the comment that the gross receipt tax increase isn’t a tax on consumers. What a bunch of bull! The low-life legislature likes to brag about Delaware not having a sales tax. At least, in states that have a sales tax, the consumers can see exactly how much they are paying. With Delaware’s gross receipts tax, we get to pay a “sales tax”, but we can’t see how much we are paying.
Anon—I think we also have to pay a document fee when we purchase a car.