Archive for June, 2009

While Delaware lawmakers consider some two dozen (or more) proposed tax and fee increases, Maine’s legislature is moving in the opposite direction. From the Wall Street Journal,

At last, there’s a place in America where tax cutting to promote growth and attract jobs is back in fashion. Who would have thought it would be Maine?

This month the Democratic legislature and Governor John Baldacci broke with Obamanomics and enacted a sweeping tax reform that is almost, but not quite, a flat tax. The new law junks the state’s graduated income tax structure with a top rate of 8.5% and replaces it with a simple 6.5% flat rate tax on almost everyone. Those with earnings above $250,000 will pay a surtax rate of 0.35%, for a 6.85% rate. Maine’s tax rate will fall to 20th from seventh highest among the states. To offset the lower rates and a larger family deduction, the plan cuts the state budget by some $300 million to $5.8 billion, closes tax loopholes and expands the 5% state sales tax to services that have been exempt, such as ski lift tickets.

This is a big income tax cut, especially given that so many other states in the Northeast and East — Maryland, Massachusetts, New Jersey and New York — have been increasing rates. “We’re definitely going against the grain here,” Mr. Baldacci tells us. “We hope these lower tax rates will encourage and reward work, and that the lower capital gains tax [of 6.85%] brings more investment into the state.”

These changes alone are hardly going to earn the Pine Tree State the reputation of “pro-business.” Neighboring New Hampshire still has no income or sales tax. And last year Maine was ranked as having the third worst business climate for states by the Small Business Survival Committee. Still, no state has improved its economic attractiveness more than Maine has this year.

One question is how Democrats in Augusta were able to withstand the cries by interest groups of “tax cuts for the rich?” Mr. Baldacci’s snappy reply: “Without employers, you don’t have employees.” He adds: “The best social services program is a job.” Wise and timely advice for both Democrats and Republicans as the recession rolls on and budgets get squeezed.

The most recent version of PIT increases in Delaware comes via House Bill 264. If passed, the bill will result in the following tax rates:

  • 5.95% of taxable income between $50,000 and $60,000; (inc. from 5.55% to 5.95%)
  • 6.95% of taxable income between $60,000 and $150,000; (inc. from 5.95% to 6.95%)
  • 7.45% of taxable income above $150,000 (inc. from 5.95% to 7.45%)

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President Obama and the Congress are pushing for reforms that will move the US health care system closer to that of Canada’s or Great Britain.  If this is successful, you will have fewer health care choices and your access to care will be more limited.  The government, not you and your doctor, will be responsible for determining whether you receive care.

You will be “wait listed” for critical diagnostic tests. You may wait two or three years for surgery.  You may not have access to life-saving cancer and other drugs.  Yet, you will pay higher taxes. You can help stop this government takeover of health care.

Send a message to the White House and every member of Congress by signing the petition at www.freeourhealthcarenow.com.

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State Rep. John Kowalko’s House Bill 238 is now in committee. This bill will increase the current top personal income tax rate to 6.95% from 5.95% and will create a new top tier for people earning over $100,000 of 7.95%.

House Bill 239, which will raise the fee for LLCs to $300 is now also in committee.

As is House Bill 240, which will raise the corporate franchise tax from $165,000 to $195,000.

All of theses bills are economy killers. In a time when we need to be stimulating the economy, spawning new entrepreneurial activity and creating jobs we cannot, should not and must not raise taxes.

Wait, there is more. Kowalko is also sponsoring House Bill 241 which will further increase the fees on LLCs to $275 (a variation to House Bill 239, as best I can tell).

And a variation to House Bill 238, which will set the following P.I.T. rates:

  • 5.65% of taxable income in excess of $25,000 but not in excess of $60,000;
  • 6.95% of taxable income in excess of $60,000 but not in excess of $100,000;
  • 7.45% of taxable income in excess of $100,000.

Please help us oppose this legislation by contacting your state legislator and voice your opposition to tax increases.

Scroll down to find your legislator’s contact information. Don’t know your legislator, go here.

In case you would like a reminder on why taxes are bad, watch this:\

State Representatives (district number is next to the legislator’s name)

Representative Dennis P. Williams (1)
Office: 302-744-4351
Representative Hazel Plant (2)
Office:  302-744-4351
Representative Helene Keeley (3)
Office: 302-744-4351
Representative Gerald Brady (4)
Office:  302-744-4351
Representative Melanie Marshall (5)
Office: 302-744-4351
Representative Tom Kovach (6)
Office: 302-744-4174
Representative Bryon Short (7)
Office:  302-744-4351
Representative Quinton Johnson (8)
Office: 302-744-4351
Representative Richard Cathcart (9)
Office:  302-744-4032
Representative Dennis E. Williams (10)
Office: 302-744-4351
Representative Gregory Lavelle (11)
Office: 302-744-4080
Representative Deborah Hudson (12)
Office:  302-744-4249
Representative John Mitchell (13)
Office: 302-744-4351
Representative Peter Schwartzkopf (14)
Office:  302-744-4351
Representative Valerie Longhurst (15)
Office: 302-744-4351
Representative James Johnson (16)
Office: 302-744-4351
Representative Michael Mulrooney (17)
Office:  302-744-4351
Representative Michael Barbieri (18)
Office: 302-744-4351
Speaker Robert Gilligan (19)
Office:  302-744-4351
Representative Nick Manolakos (20)
Office: 302-744-4321
Representative Michael Ramone (21)
Office: 302-744-4108
Representative Joseph Miro (22)
Office: 302-744-4123
Representative Theresa Schooley (23)
Office:  302-744-4351
Representative William Oberle (24)
Office: 302-744-4173
Representative John Kowalko (25)
Office:  302-744-4351
Representative John Viola (26)
Office: 302-744-4351
Representative Earl Jaques (27)
Office: 302-744-4351
Representative William Carson (28)
Office:  302-744-4351
Representative Pamela Thornburg (29)
Office: 302-744-4175
Representative Bobby Outten (30)
Office:  302-744-4083
Representative Darryl Scott (31)
Office: 302-744-4351
Representative Bradford Bennett (32)
Office: 302-744-4351
Representative Robert Walls (33)
Office:  302-744-4351
Representative Don Blakey (34)
Office: 302-744-4103
Representative Dave Wilson (35)
Office:  302-744-4150
Representative George Carey (36)
Office: 302-744-4119
no email provided
Representative Joseph Booth (37)
Office: 302-744-4251
Representative Gerald Hocker (38)
Office:  302-744-4381
Representative Daniel Short (39)
Office: 302-744-4172
Representative Biff Lee (40)
Office:  302-744-4034
Representative John Atkins (41)
Office: 302-744-4351

State Senators (district number is next to the legislator’s name)

Senator Harris McDowell (1)
Office: 302-744-4147
Senator Margaret Rose Henry (2)
Office:  302-744-4191
Senator Robert Marshall (3)
Office: 302-744-4168
Senator Michael Katz (4)
Office:  302-744-4135
Senator Catherine Cloutier (5)
Office: 302-744-4137
Senator Liane Sorenson (6)
Office: 302-744-4136
Senator Patricia Blevins (7)
Office:  302-744-4133
Senator David Sokola (8)
Office: 302-744-4139
Senator Karen Peterson (9)
Office:  302-744-4163
Senator Bethany Hall-Long (10)
Office: 302-744-4138
Senator Anthony DeLuca (11)
Office: 302-744-4165
Senator Dori Connor (12)
Office:  302-744-4164
Senator David McBride (13)
Office: 302-744-4167
Senator Bruce Ennis (14)
Office:  302-744-4310
Senator Nancy Cook (15)
Office: 302-744-4237
no email provided
Senator Colin Bonini (16)
Office: 302-744-4169
Senator Brian Bushweller (17)
Office:  302-744-4162
Senator Gary Simpson (18)
Office: 302-744-4134
Senator Thurman Adams (19)
Office:  302-744-4318
Senator George Bunting (20)
Office: 302-744-4144
Senator Robert Venables (21)
Office: 302-744-4298

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SURJ sent out the following email today. Please make a quick phone call and help show support for House Bill 168.
We need YOUR help!

On June 3rd, HB 168, which would repeal mandatory minimum drug sentencing, was considered by the House Judiciary Committee.  The vote to release the bill to the House floor came in at 4 in favor and 4 opposed (1 Representative who was a co-sponsor was absent from the hearing, resulting in a tie).  We need your help to get the bill out of committee in the House– will you contact the four legislators who voted against releasing the bill to urge them to let the full House of Representatives consider the bill?

Keep in mind…. public opinion does not support mandatory minimum sentencing.  A poll by StrategyOne shows “widespread support for ending mandatory minimum sentences for nonviolent offenses and that Americans will vote for candidates who feel the same way. ” 78% of Americans said that courts, not Congress, should determine an individual’s prison sentence.

Please send an email or make a phone call to the four legislators who are refusing to allow the bill out of committee (see below).

Please email or call the following representatives who voted against letting the bill out of committee- even if they are not your district representative.  If one of them does happen to be your district rep, even better (make sure to mention that).  Tell them you want the Legislature to consider HB 168. Ask them to release the bill from committee!

Representatives who voted against releasing the bill from the House Judiciary Committee are:

Representative Dennis P. Williams
Democrat, 1st District, Wilmington
Office Telephone No. (302) 577-8476
Home Telephone No. (302) 764-1812
Email dennis.williams@state.de.us

Representative John “Larry” Mitchell
Democrat, 13th District, Wilmington

Office Telephone No. (302) 577-8473
Home Telephone No. (302) 995-1803

Email john.L.mitchell@state.de.us

Representative William Carson
Democrat, 28th District, Smyrna
Office Telephone No. (302) 744-4351
Home Telephone No. (302) 653-8642
Email william.carson@state.de.us

Representative Clifford “Biff” Lee
Republican, 40th District, Laurel
Office Telephone No. (302) 744-4034
Home Telephone No. (302) 875-5119

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In a release entitled, “For Farmers, Cap and Trade is a Permanent Drought Season,” Economists at The Heritage Foundation’s Center for Data Analysis have dug into the details on the effects of the Waxman-Markey climate change legislation that includes a cap and trade plan to reduce carbon dioxide by 17 percent below 2005 levels in 2020 and by 83 percent below 2005 levels in 2050.

Here is what they found:

  • Farm income (or the amount left over after paying all expenses) is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94%, respectively.
  • The average net income lost over the 2010-2035 timeline is $23 billion – a 57% decrease from the baseline.
  • Construction costs of farm buildings will go up by 5.5 percent in 2025 and 10 percent by 2034 (from the baseline).
  • By 2035, gasoline and diesel costs are expected to be 58 percent higher and electric rates 90 percent higher.
  • The cost of producing everything from wheat to beef will increase. Indeed, the price deflator for private farm inventories goes up over 20 points by 2035. This increase gets quickly translated into much higher food prices for consumers at the grocery stores.


According to the release,

Most of our readers know cap and trade is an energy tax in disguise. The goal of cap and trade is to drive up energy costs so much that Americans use less. But there’s a fundamental problem with this. Just about everything we do and everything we consume uses energy, so even after consumers turn up their thermostats in the summer and down in the winter, consumers are still using a lot of energy. But under a cap and trade, they’ll be paying an exorbitantly high price for it.

Farming is no exception; in fact, farming is very energy-intensive, with fuel, chemical, electricity and fertilizer costs. They have to purchase a lot of equipment and have to construct a lot of buildings. The Heritage Foundation’s CDA estimates that the price of constructing farm buildings will go up by 4.5 percent in 2024 and by over 10 percent in 2034 (from the baseline) solely because of the upward pressure cap and trade puts on energy prices.


Worst of all is what happens to farmers’ net income. Farmers live off their gross income; what they earn in addition to that is their net income or marginal income. Waxman-Markey significantly shrinks farmers’ net income pie. Farm income is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94% from the baseline, respectively.


Waxman-Markey increases the costs of farm inventories, which in turn raises the cost of food sold to the consumer. At first glance, this may appear to be a good thing for farmers. Higher prices equals higher profit. But this would only be true if all other things were equal. That’s certainly not the case here. Higher energy prices hurt the overall economy, which means less demand for all goods, less production, higher unemployment, and reduced income. This overall economic slowdown reduces demand for agricultural goods, too.  And, as we’ve seen above from the charts, a lot changes for farmers; particularly, their overall cost of operations rise and their net incomes fall.

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The proposals to increase taxes on alcohol and cigarettes are not new. The alcohol tax increase failed last year. This year, however, it seems like these tax hikes are close to certain. Read today’s News Journal and you’ll get the sense that these proposals don’t seem to face opposition. Even the alcohol distributors seem resigned to the increase.

What strikes me as interesting is Governor Markell’s comments:

I do believe the members of the General Assembly understand that we have a very significant financial challenge and I’ve proposed painful cuts as well as revenue increases to deal with the budget situation.

The cuts are accepted as painful because the cut that has received the most attention is the 8% pay cut in state employee salary. This cut is very much painful to the state’s employees. However, we should not be duped into thinking that all the cuts are painful. The Governor and legislature have not proposed serious cuts in state spending other than the pay cut and are avoiding some of the most obvious ways in which the state can slash spending.

This begs the question, was the 8% pay cut, as painful as it is, proposed so that the tax increases could be more easily supported? With the powerful block of voters that state employees are, legislators are sure to look to the impact on the next election in weighing the pay cuts or tax increases. The united coalition of union employees opposed to the pay cuts will likely be parlayed into a more powerful opposition to those who support pay cuts than the less unified taxpayers in Delaware.

I can’t believe that anyone in office thought the 8% cuts had a chance. It was created to be a bargaining chit to get the tax increases approved and shift the argument away from a focus on such tax increases.

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Last week, the Senate finally passed House Bill 1 to open the doors of the General Assembly and at long last include it under the state’s FOIA law. Bloggers, good government folks, the media…we all showered them with praise for this long over due move.


This past Monday, the Joint Finance Committee closed its meeting to the public. Why? Because the bill hasn’t been signed into law yet.

Seems that they were more interested in the appearance of open government than, you know, really believing in it. This comes at a time when the JFC is making some big decisions on the budget, cuts and the tax increases that are coming into every home near you.

As reported by Ginger Gibson, “When the Bond Bill Committee met Thursday, co-chairman Sen. Robert L. Venables, D-Laurel, kept the meeting open to the public, citing compliance with the spirit of the legislation even though it hasn’t been signed.” Good for him and for the rest of the Bond Bill Committee.

In contrast, Rep. Dennis Williams response to his closing the door on open government:  “It’s not the law. Why would I open it up if it’s not the law?”

This is your General Assembly.

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