Delaware House approves repeal of estate tax, hike corporate franchise fee
The estate tax may soon be a thing of the past in Delaware.
Right now, any real estate, property and general wealth passed down by someone after they die that’s worth a combined $5.5 million is taxed by the state.
Removing that tax will cost Delaware an estimated $3.8 million next year and $5 million a year by 2020.
Republicans say the state loses even more when the wealthy families move out of Delaware to avoid the estate tax - taking other taxable income with them.
It was meant to plug a historic $800 million budget deficit in 2009.
But Rep. Mike Ramone (R-Middle Run Valley), who’s sponsoring the bill, says the move did damage to the state’s bottom line in the long run.
“The estate tax is one of the only tax increases that we passed in recent time that actually cost the state more money that it would’ve made if we didn’t pass the bill,” Ramone said.
The bill is an olive branch to the GOP to drum up votes for a future budget compromise.
Despite that, Rep. Paul Baumbach (D-Newark) says it’s too early to be voting on this without the other pieces of a deal.
“When you find yourself in a hole the first step is to stop digging. This has us dig $3 million deeper. I understand this part of the grand solution, but we don’t have the grand solution yet,” Baumbach said.
The measure passed 26-14. House lawmakers also quickly passed a bill that would raise $115 million by increasing taxes on the biggest businesses incorporated in Delaware.
Both now need Senate approval.