As states across the country experience major tax windfalls, many are taking the chance to relieve the tax burden on their citizens and help them weather the inflation hurricane. While other states are passing tax relief, Delaware lawmakers are taking the opportunity to increase their budget by nearly 7% without any long-term tax reform. While the budget does include a minor restoration of a property tax credit for seniors, it leaves most taxpayers fending for themselves as costs soar and wages stagnate.
Americans for Tax Reform commends Delaware Republicans for successfully restoring the tax credit for seniors. Although Rep. Kevin Hensley’s (R) original proposal would have doubled the tax credit, Rep. Michael Ramone’s (R) compromise effecting a cap of $500 is still a small victory for taxpayers. As seniors typically rely on a fixed income, they are more vulnerable to economic conditions whittling away at their retirement funds while steadily increasing the cost of living. Qualifying persons will receive up to $500 in a tax credit for property tax payments, up from the limit of $400 in the previous budget.
Unfortunately, the tax credit is the only victory taxpayers saw in the new $5.1 billion dollar budget. The Tax Foundation ranked Delaware as the 9th worst state in the union for state and local tax burdens in 2022. The new budget fails to remedy this fact and incorporated only one of many proposals from Republican lawmakers, which included cutting personal and corporate income tax rates and reducing the gross receipts tax on businesses. Delaware lawmakers did enact a tax rebate program earlier this year by sending some of the billion-dollar surplus back to the people, but such checks are not a substitute for long-term reform. Delaware legislators would do well to work toward structural, long-term relief to make the Blue Hen State a better place to live for all and promote jobs and growth for years to come.