Charlie Copeland, the director of the Center for Economic & Fiscal Policy at Caesar Rodney Institute, recently authored an eye-opening piece regarding Delaware’s largest revenue source – corporate franchising. State spending has climbed, while corporate franchise income has not. The Delaware Legislature’s solution: increase taxes and fees on businesses!
For decades, our state had been the nation’s incorporation capital. Taxes and fees companies that pay to incorporate here make up 30% of Delaware’s General Fund. Presently, franchise taxes remain flat except for the House Bill 400 tax increase approved in May by Gov. Matt Meyer. To fill our revenue gap, officials just raised the cost of doing business in Delaware. Copeland points out while businesses incorporated here increased by 25.4% since 2021, franchise tax revenue has decreased by 6%.
Yes, Delaware is still gaining companies, but revenues are lower with less collected. The reason why is competition! Delaware‘s increase in corporate franchise taxes is actually chasing customers away. Places like Texas make relocation attractive. They charge no personal income tax, keep business taxes low and have consequently created a regulatory and litigation environment for businesses better than Delaware’s. The result is Texas has been named the best state for business for almost 20 years. They even have a rival business court to compete with Delaware’s Court of Chancery, previously the gold standard.
Sadly, Copeland is correct when he points out Delaware’s problem is spending, not revenue. Our state raises prices, while Texas steals our customers, like Exxon and SpaceX. The outcome should have been foreseeable by elected officials.
Gary Dunham
Wilmington
A letter to the editor expresses a reader's opinion and, as such, is not reflective of the editorial opinions of this newspaper.
To submit a letter to the editor for publishing, send an email to viewpoints@capegazette.com. All letters are considered at the discretion of the newsroom and published as space allows. Due to the large volume of submissions, we cannot acknowledge receipt of each submission. Letters must include a phone number and address for verification. Keep letters to 400 words or fewer. We reserve the right to edit for content or length. Letters should be responsive to issues addressed in the Cape Gazette rather than content from other publications or media. Letters should focus on local issues, not national topics or personalities. Only one letter per author will be published every 30 days regarding a particular topic. Authors may submit a second letter within that time period if it pertains to a different issue. Letters may not be critical of personalities or specific businesses. Criticism of public figures is permissible. Endorsement letters for political candidates are no longer accepted. Letters must be the author’s original work, and may not be generated by artificial intelligence tools. Templates, form letters and letters containing language similar to other submissions will not be published.
Event Details :
Premier Listing
Sponsored Content
