State Rep. Rich Collins is sponsoring a new measure to help Delaware’s working families avoid having their earnings unfairly taxed at higher rates.
House Bill 278 would require the state’s personal income tax brackets to be annually adjusted for inflation.
Supporters of the bill say Delaware’s income tax inflexibility hurts low- and moderate-income Delawareans the most. Of the state’s six graduated income tax brackets, four set rates on annual earnings between $2,000 and $25,000. Each segment of income is taxed at the rate of the bracket into which it falls.
“The value of cost-of-living raises earned by low- and moderate-income Delawareans is being eroded by our state’s rigid tax system,” Rep. Collins said. “Wages growing in recognition of inflation are being taxed at higher rates as those earnings are pushed over static tax bracket thresholds. It amounts to state theft by inefficiency.”
The bill is pending action in the House Revenue & Finance Committee.
