Delaware’s Tax Structure is not something to celebrate.

Filed in Delaware by on January 21, 2015

State Representative Bryon Short was on Facebook over the weekend highlighting this study that argues that Delaware has the best tax system in America, in that it is the least regressive (i.e. taxes the poor and lower and middle classes of income earners more than the top earners). I thought to myself, how the hell could that be? Someone early $60,000 pays the same tax rate as someone making $6 million under the state income tax scheme.

What I was forgetting is the “no sales tax.” Sales and other consumption taxes are very regressive because they fall most disproportionately on the poor. And that is the sole reason we are the least regressive tax system in America.

Delaware’s income tax is not very progressive, but its high reliance on income taxes and low use of consumption taxes nevertheless results in a tax system that is only slightly regressive overall.

Let’s define our terms here. A progressive tax is not necessarily a tax that the PDD or Delaware Liberal would like (although it is). This chart explains:

Capture

Delaware has a very regressive income tax structure, as described above and shown below:

Tax.Brackets

For incomes above $60,000, Delaware essentially has a flat tax. So that is why when I first saw this headline being touted by a Democrat, of all people, I did a double take. Mr. Short, you need to stop. Delaware is not the least regressive state on income taxes. It is one of the most regressive state. So you, Mr. Short, need to use your power as a Committee chair to make Delaware’s income tax more progressive.

How do we do that? Let’s start by making the Earned Income Tax Credit fully refundable.

Perhaps the most important factor enhancing income tax fairness in recent years has been the proliferation of low-income tax credits. These credits are most effective when they are refundable — that is, they allow a taxpayer to have a negative income tax liability which offsets sales and property taxes — and are adjusted for inflation so they do not erode over time.

Twenty-five states and the District of Columbia have enacted state Earned Income Tax Credits based on
the federal EITC. Calculating a state EITC as a percentage of the federal credit makes the credit easy for state taxpayers to claim (since they have already calculated the amount of their federal credit) and easy for state tax administrators to monitor.

Refundability is a vital component of state EITCs to ensure deserving families get the full benefit of the credit. Refundable credits do not depend on the amount of income taxes paid: if the credit exceeds income tax liability, the taxpayer receives the excess as a refund. Thus, refundable credits usefully offset regressive sales and property taxes and can provide a much needed income boost to help families pay for basic necessities. In all but four states (Delaware, Maine, Ohio and Virginia), the EITC is fully refundable.

That is an embarrassment for Delaware, and it must end now. Make the EITC fully refundable. Now.

Tags:

About the Author ()

Comments (81)

Trackback URL | Comments RSS Feed

  1. Jason330 says:

    Even if it were true that Delaware was the least regressive tax system in America. It isn’t worth celebrating.

    That is only saying that we suck slightly less than all the other suck holes that are allowing the poor and middle class to shoulder the bulk of the state’s tax burden.

  2. donviti says:

    Where’s Markell on this issue?

    (can’t stop laughing)

  3. A phony meme being propounded by a Carperite legislator (at least when it comes to taxes).

    It will be uttered over and over again by those who don’t believe the wealthy should pay their fair share.

  4. MikeM2784 says:

    If they wouldn’t fix the flat tax at the top during the depths of our economic despair instead of cutting middle class wage state employees pay, they certainly won’t do it now.

  5. Dave says:

    “i.e. taxes the poor and lower and middle classes of income earners more than the top earners”
    ” Someone early $60,000 pays the same tax rate as someone making $6 million under the state income tax scheme. ”

    Ok, are you discussing who pays more or who pays what rate? The rich pay more in actual dollars, but in Delaware the rates are pretty flat. Additionally, is there actually anyone in Delaware who has a “salary” anywhere close to $6M? The wealthy do not make most of their money in wages. Even if you were to get an extremely progressive tax system in place, the wealthy the actual tax rate would still be fairly low because their “income” is not wages. Mitt Romney does not have a job. He may receive some income from things like speaking fees, etc. But that income is not sufficient to support him and his family in the manner to which they have become accustomed. He makes money through his investments which are taxed at a lower rate than ordinary income. Consequently his tax rate is always going to be lower. Nibbling at the margins on ordinary income is not going to get you where you want to be (and probably isn’t going to every happen).

  6. Jason330 says:

    Great point. As long as “income” is taken to mean “salary” this is all a bunch of malarkey.

  7. Anon says:

    What are your thoughts on a flat tax?

  8. We have one. Two rates, actually. One percentage for those who have under $60 K of annual income, one percentage for those who have over $60 K of annual income.

    We USED to have a progressive income tax. But, starting with Pete DuPont, and then proceeding through Mike Castle and Tom Carper, all the progressivity was wrung out of the tax code. People in Chateau Country were very happy.

  9. Anon says:

    They make more money, so even though they pay the same percentage they end up paying more. That’s a good thing. It’s fair and proportionate.

  10. puck says:

    If income were fair and proportionate, you might have a point. But we have an income tax, and as income tilts ever more disproportionately upward, the tax must follow the income. Since the rich got that way because of the labors, sacrifices, and indignities borne by the rest of us, it is fair and proportionate that they should pay at a higher rate.

  11. Jason330 says:

    This is what a stupid person would say, “They make more money, so even though they pay the same percentage they end up paying more. ”

    So I shouldn’t respond, but if a flat tax was applied to all income it would be something I’d support.

  12. Anon says:

    But with a flat tax being a percentage of income they are paying a greater share. Doesn’t matter what the income is because the greater it is, the more they are paying based off that percentage.

    Also can you cite some instances of the rich getting wealthy from your sacrifices? All employment is voluntary it’s not like business owners enslave us when we choose to show up to work.

  13. Jason330 says:

    “But with a flat tax being a percentage of income they are paying a greater share.”

    In addition to not being true, this sentence barely makes sense.

  14. Dave says:

    “if a flat tax was applied to all income it would be something I’d support.”

    Ditto. So would just about everyone else. A dollar earned is a dollar earned. I don’t care whether it is passive, active, carried interest, or earned by the sweat of one’s hand or brow.

    At the very least bring capital gains tax back to Reagan levels of 28%.

  15. Anon says:

    6% of $60k is $3,600 compared to 6% of $100k which is $6000. They’re paying more at the same rate. True and makes sense to anyone who passed a remedial math course.

  16. puck says:

    OK… but what cost does the state bear to enable some percentage of its people to make six figures? They don’t do it by themselves. Start with roads and schools.

  17. puck says:

    They’re paying more at the same rate. True and makes sense to anyone who passed a remedial math course.

    But not true to anyone who passed college-level courses in history, political science, and economics. Your fact has what is known as “truthiness.”

  18. puck says:

    Even if you were to get an extremely progressive tax system in place, the wealthy the actual tax rate would still be fairly low because their “income” is not wages.

    Isn’t capital gains income treated as regular income anyway for Delaware tax? If so that is more progressive than the Federal treatment which gives a preferential rate to capital gains. And don’t get me started on dividends.

  19. Anon says:

    That’s what paying taxes is for, and they’re contibuting more as shown above. As far as schools, not only are they likely paying more in property taxes, but they most likely pay tuition to private schools while still funding public.

    None of that matters because the discussion is about fairness. They’re earning more and paying more, proportionately. It doesn’t get more fair than that unless you’re a fanboy of the extreme policy of redistribution.

  20. Anon says:

    On the subject of history and Economics I am very curious: list me 5 books you’ve read on either of those subjects.

    Also, truthiness is derived from an emotional argument. I showed how the rich pay more using the same rate for a flat tax.

  21. puck says:

    unless you’re a fanboy of the extreme policy of redistribution.

    We already have redistribution, and it is going upward. Now it is time for some downward redistributive pressure.

    But raising capital gains taxes isn’t a direct handover. Rather than pay the tax, the rich will choose instead to re-invest in their business, creating jobs and generating business to business sales, which benefits the rich as well as everybody else.

    Being pro-business or pro-wealthy doesn’t always mean giving them everything on their Christmas list. Sometimes you have to give them incentive to eat their peas before they get ice cream.

  22. The wealth has been redistributed. In large part b/c the wealthy pay proportionately less than they paid 30 years ago when we had a progressive series of tax brackets.

    That’s not an emotional argument, it’s reality. The Top 1% now hold about 50% of the world’s wealth. The income difference between the wealthy and the rest of us has grown proportionately wider over the past twenty years. A lot wider. You can read all about it pretty much anywhere but on Fox News or from the Koch Brothers.

    I love it when apologists for the wealthy make demands like: “list me 5 books you’ve read on either of those subjects”. I’ve read a lot of books on history and economics. As have the vast preponderance of our readers. Condescending asshole.

  23. Jason330 says:

    Why these struggling $30K a year earning Republicans fight so hard on behalf of Paris Hilton is beyond me. Maybe Anon could speak to that?

  24. Bane says:

    For those of you who do not think you are being taxed enough, the Delaware Department of Revenue does take donations, please send your checks to.

    20653 Dupont Blvd # 2
    Georgetown, DE 19947

    Can’t get much fairer than a flat tax and no sales tax. It’s actually a pretty balanced way of approaching the tax system.

  25. puck says:

    Sorry Bane, taxation is a team sport.

  26. Bane says:

    Yes, I love teamwork…
    So how much would be reasonable to tax the higher wage earners? What would we classify as a high wage earner?

  27. Point of Order says:

    Everyone wants a simple tax code, but usually have no tolerance for unfairness that can create. It’s important to remember that Delaware cribs from the Federal return. If the Feds add a break, the state has to suck it up.

    For the advanced class in tax policy, decoupling would create the need for more state agents and they would require greater latitude to do the work. A progressive state tax code could be another layer of complication that could impede that ability of the DoR to collect.

    I’m all for a review of existing policy. As if that’s going to happen. The lack of a sales tax should not be scoffed. As a consumption tax, it will always disproportionately affect lower income payers.

    When all other options are exhausted, there may be some room to increase the progressiveness of the income tax.

    Freedom ain’t free. Neither is tax reform.

  28. Davy says:

    @Delaware Dem:

    Taxes in Delaware are progressive overall; the fact that Delaware’s income tax is not progressive is irrelevant. Are are you arguing that we should put a Pigovian tax on income or that Delaware’s taxes are not progressive enough?

    If you want more progressive taxation, then fine. But your apparent fixation on income taxes is stupid.

  29. Steve Newton says:

    Taxes in Delaware are progressive overall; the fact that Delaware’s income tax is not progressive is irrelevant.

    OK I can by no means be called a fan of high taxation, BUT … this is just fucking ridiculous.

    We don’t have a sales tax … we do have a gross receipts tax. Both are regressive.

    We have gas taxes, motor vehicle transfer taxes, cigarette taxes, alcohol taxes, and Bloom Energy surcharges on our electric bills. Those are all quite arguably regressive.

    We have an income tax that is flat above $60K (and Richard Franta in the WNJ telling us that this constitutes such an undue progressive taxation that millionaire CEOs won’t move here with their straphangers because they’d be charged the same taxes as veteran school teachers or senior DART bus drivers.

    Where, oh where, is all of this supposed “progressive” taxation?

  30. Davy says:

    @Steve Newton:

    Did you read the original post? Or the linked article?

    The report (http://www.itep.org/pdf/whopaysreport.pdf) that the post and the Washington Post article cite to concluded that Delaware’s taxes OVERALL were the most progressive nationwide. The report’s analysis included property, sales, and excise taxes in addition to income taxes.

    In other words, the report accounted for every regressive tax that you mentioned (except perhaps the Bloom Energy surcharge):

    Gas Tax (Excise Tax, Pages 12-13)
    Motor Vehicle Transfer Tax (Excise Tax, Pages 12-13)
    Cigarette Tax (Excise Tax, Pages 12-13)
    Alcohol Tax (Excise Tax, Pages 12-13)
    Gross Receipts Tax (Mentioned on Pages 100 and 116 as “Regressive Features”)

    If you want to know “Where, oh where, . . . all of this supposed “progressive” taxation [is],” look at Page 44 of the report. My statement was based on the report’s conclusion that Delaware’s taxes are the least regressive or most progressive.

    Going back to my original post, I am fine with people wanting taxation overall to be more progressive (“If you want more progressive taxation, then fine.”); however, focusing on income taxation to the exclusion of other taxation is stupid (“But your apparent fixation on income taxes is stupid.”). That is, we should not make income taxes more progressive simply because they are not progressive enough; we should make income taxes more progressive because taxation overall is not progressive enough.

    Next time, think before you click “Post Comment.”

  31. Andy says:

    @Steve Newton those senior Dart bus operators betterwork a bunch of overtime to hit the top rate. This comes from a Senior operator

  32. liberalgeek says:

    Actually, Davy, did you read the article? It doesn’t say that we are progressive. It said that we are the least regressive and ALL of the states are regressive.

    Next time, think before you click “Post Comment.” – Davy

  33. Davy says:

    @liberalgeek:

    My statement: “My statement was based on the report’s conclusion that Delaware’s taxes are the LEAST REGRESSIVE or most progressive.” (emphasis added). So yes, I did read the report.

    Further, the entire point of my comments was that whether (or not) Delaware’s income tax is progressive is irrelevant IF Delaware’s tax system is progressive. The post complains that the sole reason that Delaware has the least regressive (or most progressive) tax system is that we have no sales tax. But if the tax system is progressive, why the tax system is progressive should not matter (unless you have other goals besides redistribution, e.g., discouraging certain behavior). That said, just as I wrote in my other posts (“If you want more progressive taxation, then fine.” | “I am fine with people wanting taxation overall to be more progressive.”), I have no issue with people pursuing a more progressive tax system.

    Though, like 99% of Americans, I do think that I pay too much in taxes. 🙂

    ” “Next time, think before you click ‘Post Comment'” – Davy “

  34. Jason330 says:

    99%? You are among the 52% of American who think that their taxes are too high.

    Of that 52%, I wonder how many also reside in the ranks of the 64% of Americans who don’t have passports?

  35. John Manifold says:

    The gross receipts tax is not regressive. It is borne by the business owners.

    No, it’s not “passed onto the customers.” You didn’t see anyone – your dentist, your trash collector, Ronny’s, Happy Harry’s, – cut their prices when the gross receipts tax was cut in 2005. The merchants already knew what the market would bear, and they continued to charge it.

  36. kavips says:

    It is time to realize that those who are extremely wealthy and those whose mouth is permanently sewn to the orifices of those same very wealthy people (see movie “Centipede” for reference), will always attempt to argue that higher taxes are a bad thing, no matter what real evidence is ever proffered to counter it.

    Just like people will deny global warming, IF IT PROFITS THEM.
    Just like people will deny evolution, IF IT PROFITS THEM.
    Just like people will deny public schools outperform charters, IF IT PROFITS THEM.

    They will never go away, why? Because they have enough money to keep putting on the table to always start another game with the next group of suckers who come along. Instead of playing, what we (are supposed to) do is say, “sorry” and walk away from the table… “We’re not playing”… “Go set your table up outside our DMV and try to sell your ideas there” …. (late 1980’s Lyndon LaRouche reference).

    So there is no real argument at all over whether higher taxes are bad. They are as bad is evolution is bad… Bad only that it upsets the extinct notions of some prior world where make-believe once ruled. Reality shows every one of us that prosperity and high taxes go hand in hand. They are called historical charts. Just like reality shows us that some traits from mommy, and some traits from daddy, show up in Little “Ms”. Junior… What? Go figure. (Gee, they thought only a miracle could explain such.)

  37. jason330 says:

    Great points. The problem is that there are literally no institutions offering a counter argument to “higher taxes = bad”

    Where once we had a Democratic Party that was willing to be guided by facts and reason, now we have Markells, Carneys and Carpers who are fully immersed in the fantasy world of Laffer Curves and austerity.

  38. Dave says:

    “The problem is that there are literally no institutions offering a counter argument to “higher taxes = bad” ”

    because (in my opinion) they attempt to counter that KISS argument with what is essentially gibberish. The KISS argument wins every time (“it’s the economy stupid”).

    What about “income = income, regardless of how you make that income” Why do we have “ordinary income” “dividends” “capital gains” “passive income” “Ministers’ Compensation & Housing Allowance ” “interest” “carried interest.” Why are child support payments not income to the payee? Why? Why? Why?

    Is it any wonder that higher taxes = bad wins every time? And unfortunately, anyone attempting to counter that paradigm would offer a massive bill (ACA would pale by comparison) in an attempt to immediately right all wrongs, thereby gaining absolutely nothing. What is so difficult about keeping it simple? Start with the simple narrative that income is income, regardless of the source or method of earning it. Change the 1040 to a line that that says “Total Amount of Money That You Now Have That You Did Not Already Have At The Start Of The Year.” I fail to see why that is so hard.

    If you want to do some social engineering or other exemptions, then do so, but don’t game the system by exempting income from the get go.

    KISS

  39. Davy says:

    @kavips and Jason330:

    To deny that higher taxes on a behavior discourage the behavior is to deny that higher prices on a product discourage buying the product (barring the scenario of absolute price inelasticity). Higher income taxes do discourage productivity; the question is whether the money generated by higher income taxes is put to better use by the government or the taxpayer. That is a matter of politics and policy.

    My issues with highly progressive income taxes are that increasing top marginal rates raises very little revenue and arguments about fairness do not appeal to me.

    Further, simply raising top marginal tax rates hurts people who lack the power to lobby for exclusions and deductions effectively. I am one of those people: I pay 40% of my income to federal, state, and local governments. I would not consider raising marginal rates unless the entire system is revamped.

    @Jason330:

    And 42% of Americans believe that their taxes are high enough. So only 6% of Americans believe that they pay too little. Everyone seems to want to raise taxes on people who make more money, but only 3% of Americans say their taxes are too low.

    I also note that the poll only concerns federal income taxes. The poll excludes payroll taxes, state taxes, and local taxes.

  40. Jason330 says:

    “Higher income taxes do discourage productivity..”

    That’s simply false, but if you think you can back it up with a link, go ahead and try.

    “…the question is whether the money generated by higher income taxes is put to better use by the government or the taxpayer.”

    If that is the question, it isn’t much of a question since multi-generational cash hoarding doesn’t do much for the economy.

  41. Dorian Gray says:

    Perhaps someone should phone Sam Brownback in Kansas and ask how those super low tax rates really fueled a economic growth and prosperity!

    It’s the argument that never dies. It get’s disproven over and over and over and over… yet people keep making it over and over and over and over.

  42. mediawatch says:

    Let me put some real numbers on this, and let’s talk about this business about higher income taxes discouraging productivity.
    Here’s an example using current federal tax rates. (I’ve calculated for a single taxpayer, with 10% rate on first $9,075 of income, 15% on income up to $36,900, etc.
    Taxable income of $80K, at top rate of 25%, lets the taxpayer net $64,144.
    Taxable income of $100K, at top rate of 28%, lets taxpayer net $78,824.
    Now, say the top rate on the last $20K earned is still 25%, then the taxpayer nets $79,144.
    In this example, give an individual a chance to earn $20K more and tell him that higher tax rates are going to cost him $320.
    Anyone who is foolish enough to refuse to cash in on that opportunity because of an additional $320 in taxes … well, there’s a victim of voodoo economics.
    Davy, I’m looking at you.

  43. kavips says:

    I am still waiting for someone to explain HOW higher marginal taxes discourage productivity… Nothing out there.

  44. Davy says:

    @Jason330, mediawatch, and Kavips:

    I begin with a 2011 article from Slate: http://www.slate.com/articles/news_and_politics/explainer/2011/02/if_they_tax_do_we_relax.html

    So Kavips, I went to a progressive website, and I found exactly what you were waiting for. How fortunate.

    Now to a brief discussion.

    Do you believe that higher prices do not discourage people from buying services and goods? Income is no different except the price is your time. If I earn less per hour, then I might substitute play for work. This is called the substitution effect.

    The onus is on you to demonstrate that income is different. I also note that rejection of the position would result in a rejection of Keynesian economics. So also produce your preferred heterodox theory.

    Now to mediawatch’s example. The difference between 25% and 28% is $0.03 per $1.00. This increase is small, so the effect on productivity is also small. But would the effect be small if the increase was larger? I also note that elasticities matter too.

    Further, you might laugh at the Laffer Curve, but economists do not. Data indicates that the United States is on the left-hand side of the curve, i.e., increases in tax rates should produce increases in revenue. But increases in tax rates would still discourage productivity.

    Higher taxes can still produce greater utility even if productivity decreases (e.g., if the government uses the revenue better than the taxpayers would). As I have always said, THIS is a matter of politics and policy. But the argument that increasing taxes has no effect on productivity is simply stupid.

  45. jason330 says:

    Your link refutes your argument, idiot.

  46. Geezer says:

    The question isn’t just whether tax rates increase or decrease productivity — it’s also who reaps the fruit of that productivity. The US economy has been out of recession since 2009, but few outside the top 1% have seen any gains.

    You’re also missing an important point: For productivity to suffer, it doesn’t matter if one person stops working — it only matters if nobody will do the work. If I quit my high-paying job because I don’t like the tax rate, that job will go to somebody else.

    In short, you’re pissing up a rope because your understanding of economics is limited at best.

  47. Geezer says:

    And here’s a map showing that Delaware is among the states where the rich are getting richest:

    http://www.huffingtonpost.com/2015/01/26/most-unequal-states-in-america-map_n_6532350.html

    Yay, Delaware!

  48. Jason330 says:

    Thanks for that Link Geezer. God forbid we ask our wealthy (who have collected over 300% of ALL income growth in Delaware over the past few years) for anything – they might get a sad face.

  49. mouse says:

    A big part of Delaware’s appeal is for cheap taxes for monied folk and a haven for corporate crooks

  50. Dorian Gray says:

    You mean ” Job Creators™ “

  51. Davy says:

    @jason330:

    “According to economist Jonathan Gruber of MIT, dips in taxable income wipe out more than half of the potential revenue from a tax hike on the affluent, but less than one-fourth of that effect derives from actual losses in productivity.”

    Yeah. My link REALLY refuted my argument. NOT.

    In addition, lower taxes and less regulation would spur economic growth; however, the question is whether the benefits of increased growth are worth the costs of lower taxes and less regulation. The answer is a matter of policy and politics. But I digress.

    Please give me my 50 dollars. Below is your “any evidence.”

    From the Brookings Institution:

    “Several empirical studies have attempted to quantify the various effects noted above in different ways and used different models, yet mostly come to the same conclusion: Long-persisting tax cuts financed by higher deficits are likely to reduce, not increase, national income in the long term. By contrast, cuts in income tax rates that are financed by spending cuts can have positive impacts on growth, according to simulation models.”

    http://www.brookings.edu/~/media/research/files/papers/2014/09/09%20effects%20income%20tax%20changes%20economic%20growth%20gale%20samwick/09_effects_income_tax_changes_economic_growth_gale_samwick.pdf

    From NBER:

    “First we think that tax policy does affect economic growth. There is enough evidence linking taxation and output growth to make the reasaonable inference that beneficial changes in tax policy can have modest effects on output growth. The implied effects from the ‘bottom up’ micro-level studies, and the ‘top down’ cross country regressions, are quite close in magnitude: a major tax reform reducing all marginal rates by 5 percentage points, and average tax rates by 2.5 percentage points, is predicted to increase long term growth rates by between 0.2 and 0.3 percentage points.”

    http://www.nber.org/papers/w5826.pdf

    @Geezer:

    It’s not a matter of quitting a job. We are talking about decreases in productivity at the margins: working 39 hours per week rather than 40 hours per week.

    Further, your response assumes that there is always someone else to do the work no matter the price. Even basic economics indicates if wages decrease then workers will supply fewer hours (unless the wage elasicity of supply is perfectly inelastic).

    Your assertions assume that the labor market is different from any other market.

    You also note: “The question isn’t just whether tax rates increase or decrease productivity — it’s also who reaps the fruit of that productivity.”

    I acknowledged this: “Higher taxes can still produce greater utility even if productivity decreases (e.g., if the government uses the revenue better than the taxpayers would). As I have always said, THIS is a matter of politics and policy.”

    @Jason330 and Geezer:

    I do not dispute that higher income taxes could be desirable; however, the cost is slower economic economic growth. The question is whether redistributing a smaller pie creates more utility than leaving a bigger pie as is.

  52. Davy says:

    @mouse:

    “A big part of Delaware’s appeal is for cheap taxes for monied folk . . . .”

    Incorrect. A big part of Florida’s appeal is cheap taxes (i.e., no income tax) for high earners, like professional athletes. People do not domicile in Delaware because it has low tax rates.

    “A big part of Delaware’s appeal is . . . a haven for corporate crooks.”

    Living in Delaware does not save corproate crooks from the SEC or the U.S. Department of Justice. Look for another bogeyman.

  53. Jason330 says:

    National Bureau of Economic Research? LOL. Please. Why not quote the Bible as “proof” that Jesus was the son of God?

    Also….”In addition, lower taxes and less regulation would spur economic growth…” This is pure faith based BS. When has that actually ever happened? Let me know and come for my $50.00 – or go soak your head. I’m good with either.

  54. Davy says:

    @Jason330:

    I cited to the Brookings Institution as well. Why ask for evidence is you are just going to dismiss it without any basis?

    Further, I would not cite the Bible as proof of anything: I’m neither Christian nor particularly religious. Though, citing the Bible is arguably better than citing nothing like you have.

    Ultimately, you are bully that cannot defend his own ideas. You substitute rhetoric for substance. Throughout this entire thread, you have cited NOTHING to support your position. You are content to offer bets that you have no intention of honoring and to launch ad hominem attacks against others. This is your blog, so bullying is perhaps your perogative; however, your bullying is one thing you have in common with some people you deride as “Teabaggers.”

  55. Jason330 says:

    You substitute faith based bullshit for substance. Put up or shut up. It is that simple.

  56. Davy says:

    @Jason330:

    I did, and you did not bother to refute the sources on the merits. I quoted papers associated with two of the most influential think tanks in the United States; in contrast, your lone argument was that citing National Bureau of Economic Research was the equivalent of citing the Bible. That is colloquially known as “bullshit.” NBER’s members include economists from across the political spectrum, including Paul Krugman and 22 other winners of the Nobel Memorial Prize in Economic Sciences. Further, you ignored the paper associated with the Brookings Institution. Is the Brookings Institution so disreputable now that no response is necessary? That would be news to me. So, lead the way: “Put up or shut up.”

  57. Geezer says:

    @Davy: Your understanding, or lack thereof, of economics is of no interest, and your presumption to be “instructing” anyone laughable. Find something more constructive to do with your time, because as it stands you are refuting your own theorizing by performing the function of fool for free.

  58. SussexAnon says:

    “Incorrect. A big part of Florida’s appeal is cheap taxes (i.e., no income tax) for high earners, like professional athletes. People do not domicile in Delaware because it has low tax rates.”

    Nope, you are incorrect. Ask any Realtor in Sussex County. Fastest moving demographic moving to Sussex? 55 and over. People are moving here from surrounding states for lower taxes. Why pay $5-10k a year in property taxes when you can move to Sussex buy more house for less money and pay $1k a year. These are either retirees or future retirees on a 5-10 year plan to move here and retire. And they can still be a few hours drive from family in the old neighborhood.

    The fastest moving demographic out of Sussex is 30 and under because there are far less opportunities and jobs here.

  59. Jason330 says:

    It’s not my job to disabuse idiots of their faith based idiocy. If you think you can make a case for your bullshit go ahead and try. When has your conservative fairytale ever worked in practice? When, idiot? Spit it out.

    You won’t because you can’t.

  60. Davy says:

    @SussexAnon:

    Seniors are income poor, property rich. Notice that I said high earners. You are correct that people with property will flock to states with low property taxes. That said, per the paper that Delaware Dem cited to in the original post, property taxes are actually regressive. So, we could raise property taxes, but that would actually make our taxes even less progressive.

    @Jason330:

    I already made my case. In fact, I cited evidence. As it stands, you have yet to cite ONE paper or shred of evidence that supports your position. Instead, you rely on, what I can only imagine, is your personal experience.

    You also clearly misunderstand what “faith” means. Generally speaking, faith is belief in the absence of proof. I provided evidence of my position. You have not. Does that not suggest I am “disabusing a idiot of his faith based idiocy”? What evidence supports your fairytale? Well? “Spit it out.”

    Actually don’t. You’ve embarrassed yourself enough. Or rather, you’ve demonstrated that you’re more interested in attacking me than anything else.

  61. Geezer says:

    @Davy: Do you really not get what the Slate article said? There is no drop in actual productivity; the lower reported total has to do with tax-code machinations. They don’t produce less, they just take fewer profits.

  62. SussexAnon says:

    “People do not domicile in Delaware because it has low tax rates.”

    Yes. They. Are. You can argue progressive/regressive til the cows come home. People know a good deal when they see it. They get to vote with their feet and they are moving here. Delaware is the Florida of the Mid-Atlantic. At least the southern part is. Sussex and even parts of Kent are havens for tax refugees from NJ, NY, PA, MD, VA, DC.

    As for FL, they have a homestead exemption that includes property taxes, and school taxes as well as assessments.

    People decide where to move on many factors. Taxes is one of them. And by taxes, I mean all of them. Not just income.

  63. Jason330 says:

    “I already made my case. In fact, I cited evidence.” LOL!

  64. puck says:

    “I do not dispute that higher income taxes could be desirable; however, the cost is slower economic economic growth.”

    This is an article of faith among conservatives, but history proves exactly the opposite. That is why we point and laugh at conservative economic theories.

    The best tax increase is one that is never collected. Up to a certain point, higher taxes produce tax avoidance behaviors, namely re-investment in productive activities.

  65. Jason330 says:

    Well put. This idiot is so typical of the conservative nutbag who is thoroughly convinced that up is down. They are “Club for Growth” brainwashed lunatics, and loving it. And yet, they simply can’t provide ONE EXAMPLE of tax cuts and deregulation creating broad-based, enduring economic expansion. Not one single example. Not here, not in Europe, not anywhere, because is it pure poppycock.

    But – fuck it – that crap sounds good, so they go on pretending.

  66. Geezer says:

    To be fair to Davy, you can come up with equations that show what he claims. It’s only hard to prove in the real world.

  67. Dave says:

    “Delaware is the Florida of the Mid-Atlantic”

    Yep it is. I have a family member who sells new homes for a builder. Mostly what you get are NJ, PA, NY coming here because of taxes. The ones from NJ but want don’t like the taxes, so they come here and the first thing they want to do is recreate NJ in Delaware. MD follows closely behind that group and VA tails. Mostly the VA folks want to live at the beach.

    The first thing they do once arriving is to complain about the lack of infrastructure and services. Somehow they are unable to make a connection between the services they have in NY and taxes and so they think they think they should be able to have what they had in NJ/NY and low taxes.

  68. Geezer says:

    “the first thing they want to do is recreate NJ in Delaware. ”

    As long as that doesn’t mean beach tags…

  69. pandora says:

    Hmmm… bet Dave came from Virginia. 😉

  70. Dave says:

    Yeah. And the builder’s survey data says that like me, traffic and population density are the prime considerations for the move for those from Virginia. I had no clue about Delaware’s taxes(except for the sales tax) because it was just not a significant concern.

  71. Geezer says:

    “the builder’s survey data says that like me, traffic and population density are the prime considerations for the move for those from Virginia.”

    In that case, how much more construction does eastern SuxCo need before its traffic and density are the same as Virginia’s?

  72. Dave says:

    Need? None. But before Sussex County (population 206,649) becomes like Fairfax County, VA (population 1,130,924), we have a ways to go. Eastern Sussex doesn’t need anymore at all as far as I am concerned. Now that I’m here, we can stop any and all construction. But then, the construction industry puts food on the table.

    Delaware in general, needs to consider the basis for the economy and the sustainability of that economy. Chicken plants, casinos, restaurants, shopping, and banks only go so far.

  73. Geezer says:

    That’s why I said “eastern” Sussex, which is smaller and denser.

    Why Delaware’s beach instead of Virginia’s?

  74. mouse says:

    The DC folk from NOVA are closer to here than Va Beach. Nicer here too

  75. Dave says:

    Yep, nicer. And I’m still expected to show my face in DC on occasion.

  76. SussexAnon says:

    Virginia beach is a City. You spend more for a home and get less. And the taxes are higher.

    People who move here and complain is nothing new. Everyone who has moved here at some time has realized “hey back in (insert town you just moved from) we have (insert what Sussex doesn’t have, sidewalks, local police, public transportation, jobs, etc) The problem arises when they make statements and actions desiring such things as if they are free.

  77. Davy says:

    @Geezer:

    Read the article: “According to economist Jonathan Gruber of MIT, dips in taxable income wipe out more than half of the potential revenue from a tax hike on the affluent, but less than one-fourth of that effect derives from actual losses in productivity.”

    So, increases in tax rates lead to losses in productivity. The question is how large (or small) the loss is. Please tell me again how a loss in productivity is no loss in productivity.

    @Jason330:

    You’re asking me for anecdotal evidence to prove my position. You would (rightly) laugh if someone argued against climate change on the basis of anecdotal evidence.

    @Jason330 and Geezer:

    I also note that the EITC was designed with the effects of higher effective marginal tax rates in mind: decrease the cost of working by subsidizing low wages, and phasing out the subsidy gradually to avoid extremely high effective marginal tax rates associated with older benefit programs (according to the EPI, the effective marginal tax rate ranges from -55% to 36%).

    Finally, lets look to the EPI:

    “On net, the empirical evidence indicates that a marginal tax rate increase will modestly decrease labor supply, and the response is generally quite stable across the income distribution (although lower-income households eligible for the Earned Income Tax Credit are more responsive, as intended).”

    http://www.epi.org/publication/raising-income-taxes/

    Does “modest decrease” mean “no decrease” now?

  78. Jason330 says:

    Idiot, I’m asking for ANY evidence to prove your position. Conservative think tanks don’t provide evidence they provide idiots like you talking points.

    If anyone can present any evidence that the “tried and true policies of small government and low regulation” actually created any broad based, long term, durable economic growth …ever – I will give the person providing the evidence a crisp new $50.00 bill.

    If you are so sure your conservative horseshit nonsense works, show me it has, and you pocket an easy $50.00.

    You won’t because you can’t.

  79. Geezer says:

    @Davy: Read the article yourself. Less than 25% of the gap in expected revenue comes from people actually earning less. You apparently don’t understand what “negligible” means. One-quarter of the effect — tax increases netting only 50% of expected income) 1/8th of the expected revenue will be lost to drops in income . That means the other 7/8ths aren’t affected. And of course, that’s reported income. We don’t know that anyone actually works less, just that they claim to.

    Getting past that, you also don’t seem to understand that “productivity” is a bullshit term in this discussion, as it presumes that higher earnings are a function of higher “productivity.” In reality, productivity is simply the value of goods/services produced divided by the cost of the labor to produce them. Hence “productivity” leaped in 2009 not because more goods/services were sold — fewer were, in fact — but because so many formerly “productive” workers were fired and their duties added to the remaining workers.

    Take your “skills” to your nearest nest of libertarian jerk-offs. They’re more likely to appreciate them.

  80. Geezer says:

    Since the report is the bone of contention, here’s the direct comment about Delaware:

    “Delaware’s income tax is not very progressive, but its high reliance on income taxes and low use of consumption taxes nevertheless results in a tax system that is only slightly regressive overall.

    “[E]ven these least regressive states fail to meet what most people would consider minimal standards of tax fairness. In each of these states, at least some low- or middle-income groups pay more of their income in state and local taxes than wealthy families. In other words, every single state
    and local tax system is regressive…”

    Delaware’s income tax is progressive at the poverty level; it’s the middle class that’s getting screwed by the flattening of rates above $60K.