Administration economists and officials keep touting the multiplier effects from additional government spending. Extended unemployment benefits generate more than a dollar’s worth of activity in the economy. More agricultural subsidies will pump up economic growth.   This is macroeconomic smoke and mirrors. Why?   First, many industries have a higher output multiplier than government. For example, according to the U.S. Bureau of Economic Analysis, the multiplier impact of a d

This article first appeared at delawareonline.com on March 27, 2015, and in the News Journal on March 28, 2015. Normally, and from a professional point of view, I do not spend my time replying to politicians’ op-eds. They usually are full of ideological and partisan talking points without facts, data and analysis supporting them. However, as a co-author of one of the few analyses of the methodology used for the Prevailing Wage system implemented in Delaware and actually work

General Electric may be looking for a new home for its corporate headquarters in response to a whopping $150 million Connecticut state tax increase.  The company already moved once as a tax refugee from New York City to its current Fairfield, Connecticut location.  Delaware could get on the list of potential candidates for GE’s five hundred highly paid headquarters employees.   Connecticut already has a high corporate income tax rate of 9% of earnings but changed to a “combin

Despite Lois Lerner and the flow of individuals 1040s to the White House, the IRS does some positive things as well. One of these things is compiling state to state migration data based upon the year to year changes in individual tax filings. The recently released 2010-11 data for Delaware provides some insights into our states household migration patterns.   CRI identified the top ten states with whom Delaware had a net loss (out flow) of adjusted gross income between 2010 a

Again and again and again politicians have to learn that raising taxes above a reasonable level results in less tax revenue by encouraging tax avoidance. The current tax rate of 35% on the repatriated income of the foreign operations of U.S. firms, the highest rate in the developed world, is a classic example.   Rather than turn over more than one-third of their net income earned abroad to the U.S. government, companies simply keep that net income overseas. This means, of cou

Governor Markell recently proposed to the State Employee Benefits Committee increases in the monthly health insurance premium and health care deductibles for active and retired State employees and their dependents. The Governor has made a difficult, and long overdue, decision, and deserves commendation for making it.   State employee and retiree health care costs have been rising exponentially and are not sustainable. The claims have jumped 20% over the past three fiscal year

The state of Delaware gross receipt tax is levied against total business income, regardless of whether a firm makes a profit or not. Following the onset of the recent recession, one of the state’s answers to falling revenues was to twice raise the gross receipt tax. First, an increase of 25% in January of 2009 and then another jump of 8% in January of 2010.  As shown in the chart below, state gross receipts tax revenue then soared almost 50% during a time when earnings by Del

Caesar Rodneys Transparent Delaware website has been updated to include state employee payroll data through 2013. An initial pass at the latest data continues to raise the question as to why the State of Delaware government doesnt systematically track its supplemental pay system.               What jumps out from the data?               First, supplemental pay (overtime and "other") adds a major boost to State of Delaware salaries. In 2013 overtime pay added 2.7% to the state

This article was originally published at delawareonline.com on May 29 in The News Journal on May 30   The recent DEFAC Advisory Council on Revenue recommends an increase in the state's Gross Receipts Tax rate. This is a gross mistake for three reasons.   First, if you tax something you get less of it. An increase in the GRT reduces business income and leads to less hiring. Using data from 1975 through 2013 and controlling for the business cycle using Delaware personal income

This article originally appeared on delawareonline.com February 3, 2015, and in The News Journal February 4, 2015. View the original here   Survey after survey shows high levels of disillusion among voters regarding their elected officials. The sense is that the political elite display a growing contempt for the average citizen. That the political elite have an attitude of condescension regarding the average person and question the capacity of the person “in the street” to s