Low-income Delawareans will likely feel a greater pinch to their pocketbooks from legislation raising motor vehicle fees headed to Gov. John Carney's desk.
The bill, along with a proposed cigarette tax increase and planned toll hikes, has critics and tax experts warning the state's agenda to increase fees and taxes will hurt the state's most vulnerable residents.
A bill sponsored by state Rep. Eric Morrison, D-Newark-Glasgow, would raise DMV fees, including for a driver's license, state identification cards and dealership license. The most significant increase is the vehicle documentation fee, which would go from 4.25% to 5.25%.
State Rep. Madinah Wilson-Anton, D-Bear, opposed the legislation when the House passed it last week. She said it's a regressive tax, meaning most of the cost burden would land on the less fortunate.
DelDOT has proposed higher toll prices, which does not require action from state lawmakers. The plan has those from out of state bearing the biggest burden.
Miles Trinidad, a state analyst for the Institute on Taxation and Economic Policy, a nonprofit, nonpartisan tax policy organization, said flat fee increases like the document fee and the cigarette tax are regressive.
Some progressive lawmakers have been urging their colleagues to support restructuring the state personal income tax brackets, where the top rate kicks in at $60,000.
An ITEP analysis shows the top 1% of Delaware taxpayers pay 6.8% of their income in total state and local taxes — the lowest of any income group in the state. The lowest 20% pay 8.2% and the middle 20% pay 7.9% of their income in taxes.
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