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

A recent report from the Competitive Enterprise Institute confirms once again the economic boost that right to work laws provide states.     Richard Vedder and Jonathan Robe, in "An Interstate Analysis of Right to Work Laws," confirm that over time the 24 states with right to work (RTW) law have faster growing economies than states without such a law. Over a 35-year period, employment rose 105% in RTW states compared to only 50% in non-RTW states. Similarly, inflation-adjuste

The data shows that Delawares economy is still floundering. While employment is starting to pick up, the unemployment rate is stuck at twice the historic average. And this despite the labor force dropping by more than 6,500 persons since the beginning of 2013. Transfer payments remain the driving component of slow growing personal income. The strain on Medicaid and food stamps continues to rise. When asked about the states economy, the Governor typically replies with a string

Recently, with encouragement from the County Executive, Tom Gordon, the New Castle County Council voted 7 to 6 against using a $100,000 contribution from the Friends of Rockwood to renovate the county-owned Rockwood Mansion. The argument was that such construction repairs should be subject to Delawares prevailing wage system.   That argument is flawed for two reasons.   First, the argument doesnt coincide with state law. Second, the current Delaware prevailing wage system is

In a series of analyses CRI has argued the New Castle County (NCC) government is facing a serious fiscal crisis. This crisis was precipitated by the passage in 1998 of the anti-growth and anti-economic development Uniform Development Code (UDC). The recent recession has made things worse.      Within just a few years after enactment of the UDC employment in NCC flat-lined and residential building permits nose dived. Adding insult to injury, the recession took the wind out of