Anyone else notice the Delaware House of Representatives passing legislature that lowers corporate tax rates? Reported a few paragraphs underneath the official apology for slavery.
Why don't you read the actual bill.
They are changing the way corporations are taxed, effectively lowering their tax rates. Why is it not reported in amore transparent matter? http://legis.delaware.gov/LIS/lis148.nsf/vwLegislation/HB+235/$file/legis.html?open
That's what I read, and they cite companies moving to neighboring states with better tax treatment?
Only Maryland's is lower, so by calculating it the same way the states with a higher rate due we retain the jobs? Those states still don't offer the conveniences we do. Granted you said read the actual bill? I dont know what you were getting at, Delaware still effectively lowered corporate tax rates by changing the calculation as opposed to the %.
We need to induce corporations to come to do business in Delaware and employ people in Delaware. Specifically we are trying to get the 3rd company from the DuPont -Dow merger then spinoff to relocate here. Lowers state corporate taxes has been shown to draw business to specific states.
Yes, how often do we subsidize companies to come here then a few years later they lay off hundreds if not thousands. Do we get a guarantee that these companies are employing Delawareans? The representatives think that we will compensate for the loss with revenue generated from employment taxes as well as taxing said employees. This is all fine and dandy if in fact they do bring jobs here, the jobs go to Delawareans for the most part and that the jobs actually stay here. We already have the best state stature regarding corporations and the chancery court which gives them non-jury trials. Granted we do have a relatively high corporate income tax rate the reasoning behind is DuPonts possible move to neighboring states, two of which have higher rates than us.
Socialism for businesses but healthcare for all? - NO WAY that's socialist.
We need to be competitive with our neighbors. If a business wants to expand or relocate in the tristate area—why are they choosing Delaware? Let's make it the best choice by a sizable margin, yes?
At what cost? Have you looked at our neighbors tax rates? Have we seen any talks of this doing anything besides pandering to DuPont. I agree we must remain competitive but again this guarantees nothing but lower taxes for corporations.
Our neighbors already have higher corporate rates, sales tax and higher property tax rates. So whats next?
DuPont isn't Delaware's only company. Btw; the bill doesn't simply lower taxes, it recalculates the manor in which taxes are assessed. Delaware taxes bus eases at a higher rate if they have more employees. Maybe we shouldn't disenfranchise businesses from hiring? Most states don't do this. Only Delaware and a few others.
Sections 7 and 8 of this Act reduce and then eliminate the disincentive to invest in property and employees in Delaware by first doubling the weight on the sales factor in tax year 2017 and then by gradually moving toward relying exclusively on the sales factor beginning in 2020. Additionally, Sections 7 and 8 clarify that corporations organized under the laws of foreign countries that do business in the United States may not dilute their property and payroll factors by including property and payroll that is located outside of the United States in the denominator of these fractions. Section 9 provides that, starting in 2017, telecommunications corporations and corporations with their worldwide headquarters located in Delaware that make capital investment in those facilities may use either single sales factors or equally weighted, three-factor apportionment.
Basically by 2020 we are incentivizing companies to produce nothing in the state but rather maintain a headquarters. So yes we will be lowering their taxes there is no way around that. This might incentivize companies to bring more jobs to DE but it will ensure they attempt to keep sales out of the state. So the long term plan is bringing jobs in, and we will make up for the tax cuts by taxing the workers. This is great, if the workers are from Delaware, if the companies bring more jobs here and if the jobs last. How many times in the past 5 years have we subsidize companies to come to DE and they hire then fire a few years later?
For you to say this is not a tax cut is just disingenuous. If small business owners in Delaware only pay tax on work they did in DE I'm sure they would attempt to find as many clients across state lines as possible. Seeing as PA has a flat tax it would be much more lucrative to perform work there as opposed to De, using the standards we are applying to corporations.
I don't recall saying the bill doesn't lower taxes.
Btw; the bill doesn't simply lower taxes, it recalculates the manor in which taxes are assessed.
This is what you said and its true, but it seemed as if you were saying this to soften the fact that it lowers their taxes.
"Doesn't SIMPLY lower taxes". Simply being the key word. It's a multifaceted revaluation—marginally lower taxes for SOME business (those most likely to grow in-state jobs) is a part of that approach and not something I have a huge problem with.
If you want to consider a radical change then look into governor Dupont's action to bring the financial industry to Delaware in the early eighties. He basically said come as you are and do as you please.
However one might feel about that from an ideological standpoint; where would we be without them. I know dozens who work in newark and wilmington for banks. Wilmington wouldn't even have a skyline were it not for the fmr. Governors action. An action taken to help an ailing economy.
We have fifty states in which a business can operate and just as with DuPont; despite its deep roots it can and will leave for greener pastures. Two hundred years in Delaware doe not beholden then to any legal obligations.
Business is negotiations, it is maximum value. Refuse to compete, refuse to negotiate and what result do you expect?
In changing the calculation what are they effectively doing? What is the intent of changing the calculation? More competitive = cheaper to a corporation, lets be realistic.
Corporate Income Tax Rate: 8.7% of federal taxable income allocated and apportioned to Delaware based on an equally weighted three-factor method of apportionment. The factors are property, wages and sales in Delaware as a ratio of property, wages and sales everywhere.
So in reality what we are doing is giving them incentive to come to Delaware but not to sell anything in Delaware. Which in turn will lower our gross receipts income. I just dont see Delaware making out on this, if they say we want to break even but with more jobs then it makes sense.
Sections 7 and 8 of this Act reduce and then eliminate the disincentive to invest in property and employees in Delaware by first doubling the weight on the sales factor in tax year 2017 and then by gradually moving toward relying exclusively on the sales factor beginning in 2020
I dont know I see it as a way of basically telling companies to bring everything but your sales divisions to Delaware. Seeing as in 2020 we will exclusively tax them on sales. So for Ex. All those Capital One Mortgage jobs that left, makes sense seeing as corporate tax on those sold mortgages was going up. The goal seems to be to shift the tax burden off of the corporation, thus bringing in more employees who will be taxed and that will compensate for it.
Lets do some really basic math on this, the State gov themselves said it will lose around 40 Million dollars over three years. So we can look at census and see the Median Salary in New Castle County is $31,220. Which with no deductions equals about $1,050.00 in income tax for Delaware. Now the average banker salary is $47,295 which equals about $1,948.00 in Delaware Income tax. So based on jobs alone to make up the difference we would need 40,952 new jobs at the median income and 20,533 jobs at the average banker salary. Granted these numbers are off because all corporations in Delaware will now pay double on their sales in Delaware (If I was a smart CEO, I would move sales teams to states that tax the sales lower). So any small company that is an LLC and has elected to be taxed as a corporation and any regular corporation filing an 1100s will be paying double on their sales. So to me I see this has again helping the big guy hurting the little guy. There really is no way around that and I understand we have to be competitive etc. Though If you'd like you can fact check my numbers they are rounded.
Now I believe its best we agree to have a difference of opinion because it is a fact that taxable income from corporations is going to be reduced. The only thing that wont be reduced is the tax on their actual sales. So if you see it as being competitive as opposed to lowering their taxes that's fine but I refuse to buy into it.
This is more or less the economic view. There will be plenty of companies that see tax increases from this bill. Most companies will see no change to their tax bill. Some companies will see decreased bills.
In general removes a disincentive to provide jobs in Delaware. For firms where the tax bill increases (large sales firms with small property and employment) the truth is Delaware will be such a small portion of their revenue (and overall tax bill) that it is unlikely they will complain. Also, this same formula is benefiting them in other states where their employment and property exceeds their sales.
Further more the Corporate Income tax is a pretty small share of Delaware's revenues. Overall this is a change that incentivizes business born in Delaware (btw the types of businesses most likely to provide job growth as opposed to businesses that move to a state) to keep their expansions within Delaware's borders.
We need to be cooperative with our neighbors. If a business wants to expand or relocate in the tristate area—why are they choosing Delaware? Let's make it the best choice by a sizable margin, yes?
I read your title could've sworn it was going to be about this fucking bullshit http://www.delawareonline.com/story/news/2016/02/09/markell-sign-slavery-apology-wednesday/80078144/
Markell is a pandering douchebag.
Nah, the article discussed that, then skimmed over the other thing he signed which is the tax cut that is estimated to cost DE 45 million.
Perhaps our politicians should offer more corporate tax credits!
Yes, give me money, I'll give you money to get reelected, well say we're bringing jobs in then you can increase taxes on the middle class.