A proposed bill would lower the tax burden on low-income earners
A bill that would allow more lower wage earners to keep more of their pay is set to be heard Tuesday in the House Revenue & Finance committee.
House Bill 89, introduced by Rep. Paul Baumbach, D-Newark, would increase the amount of refunded tax for those who meet the federal Earned Income Tax Credit from 4.5% to 7.5%.
It would raise the floor of those who qualify for that tax credit from $9,378 for individuals and $15,449 for filing jointly to $11,828 for individuals and $20,349 for filing jointly.
The bill would increase the state’s standard deduction amount from $3,250 for individuals and $6,500 for people filing jointly to $5,700 for individuals and $11,400 for people filing jointly, starting with the 2024 tax season.
It is headed to the House Revenue & Finance committee on Tuesday at 12 p.m. Watch it here.
House Minority Leader Mike Ramone, R-Pike Creek, said that he supports the effort to change the tax code, but wishes that the Democrats would take more Republican suggestions.
“I actually have a bill out there that simplifies the tax code, still not even filed,” Ramone said. “It’s just in preparation, and this just emulates it. So I don’t know where a lot of the ideas come from, but it’s kind of funny when you’re working on something and then you see something real close.”
The bill reflects promises that Gov. John Carney made when proposing his budget for fiscal year 2024.
“The standard deduction increase is designed to catch up to years of inflation and will provide welcome relief to many middle-income Delaware families,” Baumbach said. “It will also simplify the tax reporting for many families.”
Ramone said he’s a realist and knows the bill can get passed without Republican support.
He plans to add amendments to see if he can get some of what he wants into the bill that gets to the governor’s desk
He didn’t detail those plans.
“My logic, even when I love a bill, is do no damage,” Ramone said. “So what will happen is I will do my best to amend anything that I think could be damaging or unfair or inappropriate. But I’m not going to let that stop me from allowing the people to finally keep some of their own money in their pockets.”
According to the Delaware Department of Finance in the press release, House Bill 89 will make filing easier for 370,000 taxpayers because they will not have to itemize deductions to get the highest refund possible.
About 50,000 tax filers could switch to the standard deduction and tax short form, the department said.
The bill has 11 additional sponsors and cosponsors, including 10 Democrats and one Republican, Senate Minority Leader Gerald Hocker.
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