Tax Justice Digest stories about Delaware
The author of the O'Malley administration report that makes the economic development-based pitch for slots, Thomas Perez, claims that the introduction of slots in neighboring states has "revitalized the previously moribund horse racing industries in those states." Perez describes his report as "a fact finding tour of racetracks in Delaware, West Virginia and Pennsylvania." Perez's research techniques included counting the number of Maryland license plates in a West Virginia parking lot -- but his time might have been better spent just asking West Virginia's Racing Commission chairman, who sees "no correlation... inverse, in fact" between their 1994 introduction of slots at racetracks and the current health of that state's racing industry.
Over the past few weeks, three more states have taken steps towards helping low-wage workers and their families by means of the earned income tax credit (EITC). In Delaware, the Senate Revenue and Taxation Committee recently approved a measure that would make the state's existing EITC refundable, meaning that individuals and families who owe less in personal income taxes than the value of their EITCs would receive refund checks to help offset other taxes and to make it easier to make ends meet. In Oregon, Republican and Democratic members of the House Revenue Committee have put forward a proposal that would raise that state's EITC from 5 percent of the federal EITC to 12 percent. As the Eugene Register-Guard observes this proposal would help to achieve a vital goal - eliminating income taxes on working families living in poverty in Oregon. Lastly, the Louisiana Senate has passed legislation that would create a state EITC equal to 5 percent of the federal EITC. This report from the Louisiana Budget Project details the positive impact that such a credit would have.
Once again, the public is learning that tax funded corporate economic incentives don't really work. In Oregon, right after Georgia-Pacific received a property tax break that will amount to $15 million over 15 years, the company turned around and announced that it was laying off 130 workers. Chuck Sheketoff over at the Oregon Center for Public Policy puts it the best, "[i]t's payoffs for layoffs". On the other side of the country, AAA Mid-Atlantic demanded that Delaware grant the company tax incentives if the state wanted them to move there. The twist? AAA Mid-Atlantic already made the decision to move to Delaware before they demanded the tax incentives - Delaware simply paid AAA Mid-Atlantic to do something it was already going to do. For a more in-depth analysis of AAA Mid-Atlantic's scheme, check out this report by New Jersey Policy Perspectives.
The recent shutdown of New Jersey casinos provided an opportunity for surrounding states to lure gamblers (and tax dollars) away from the Garden State. In Delaware, slot parlors saw an estimated increase of almost 20 percent in revenue. Nearby Pennsylvania has also legalized some forms of gambling and will also soon compete with New Jersey. As more and more states turn to casinos to generate tax dollars, states will probably find it more difficult to depend on revenue from this source. Instead of gambling on the future, lawmakers should focus on more reliable sources of funding. You can read ITEP’s policy brief on gambling by clicking here.
