delaware flag   The following is a release from the Republican Senatorial Caucus, stating their plan to decrease the number of people living in poverty in Delaware.

  A Brighter Future

An Agenda To Reduce Poverty

The Delaware Senate Republican Caucus March 2016


Persistent, intergenerational poverty is one of the largest problems facing the people of our state and nation. Too many of our fellow Delawareans struggle every day to fund the everyday basics of life: food, clothing, shelter & transportation. The societal costs of persistent poverty continue to mount, as do the resulting costs to taxpayers. Despite 50 years of the federal government’s “War on Poverty,” which now costs nearly $1 trillion per year, a higher percentage of people under 65 in America are in poverty today than in 1966.

Unfortunately, our 50-year governmental anti-poverty initiative has changed the approach people take to this issue. Ask a bureaucrat how we’re doing on the issue of poverty in America or Delaware, and the answer usually involves how much we spend or how many government programs we have, and not any measure of how successful those programs are.

It is time to change the focus from spending trillions to ease the difficulty of poverty, and instead aggressively focus on getting people out of poverty. It is only through reducing intergenerational poverty that our state will truly see a long-term benefit.


We recognize that completely eradicating poverty in Delaware is an unreasonable goal for now, but we feel that making Delaware the lowest-poverty state in America by 2024 is not only an achievable goal, it is the right statement to make at this time to those in Delaware who are suffering in poverty.


The easiest way to reduce poverty in Delaware is through the creation of solid, consistent, middle-class jobs. Our caucus has consistently offered policy measures we feel would lead to robust job creation. Many of those ideas lie unaddressed in Senate committees controlled by our Democratic colleagues. We will not rehash those ideas in this agenda, though we feel that robust economic development and private-sector job growth would accelerate the reduction of poverty exponentially.


The Senate Republican Caucus is made up of nine unique individuals with unique perspectives, who each represent diverse districts. While the Senators agree with each other most of the time, we do have points of disagreement and differing areas of focus. When we agreed to tackle the issue of poverty in Delaware, we did so knowing that each individual idea presented wouldn’t necessarily be supported by 100% of the caucus. Every Senator came to the table with ideas, but each also reserves the right to withhold support from certain individual ideas as they are developed.


Recently, the American Enterprise Institute and The Brookings Institution, stalwart think tanks of the right and the left, came together for a report on poverty and opportunity. The best minds from both sides of the ideological spectrum produced a compromise document that focused on three areas: work and education (which we addressed in our agenda) and the family. They determined that family composition has a direct effect on poverty levels. Marriage and delayed childbirth directly reduced the risk that a family would end up in poverty. According to the report, in 2013, the poverty rate for children in single-mother families was 45.8 percent, compared with 9.5 percent for children in married-couple families. While it is not the role of government to tell people who and when to marry, the numbers can’t be denied.


We firmly believe that we can help a significant number of people move from state-supported poverty to self-sufficiency in Delaware without creating expensive, permanent new government programs. In fact, we are convinced that through innovation and a focus on leveraging the private sector, we can reduce both poverty and government spending over the long term.


Throughout our research on this subject, we have issued a call for ideas from the general public. One housing nonprofit approached us about creating an exemption from a 2011 law that mandated certified electricians perform all electrical work on a construction project. Prior to 2011, nonprofit builders like Habitat for Humanity used skilled volunteers to run electrical wire under the supervision of an electrician. The difference between pre2011 costs and post-2011 costs was $5,000 per house. An exemption would mean more families in poverty would be able to rise into homeownership.

As a result of our intent to create an exemption as part of this agenda, certain members of the nonprofit housing community held discussions with other legislators about supporting our legislation. During those discussions, it was discovered that the desired exemption already existed, but that none of the nonprofits had been notified. Now that the nonprofit homebuilders are aware of the exemption, the benefit to their organizations will be as much as $250,000 per year. That represents multiple extra houses per year that will go to deserving low-income families.

Sometimes just asking the right questions at the right time makes a difference. We’re proud to have participated in this valuable discovery on behalf of the nonprofit builders.


One of the consistent problems we came across in researching this agenda is the fact that federal programs are structured so as to trap people in poverty. Many people who receive benefits know precisely the line in which making one additional dollar means they will begin to lose those benefits, and therefore they will attempt to increase their quality of life, but only up to the line in which those benefits begin to go away. The incentives in these federal programs are to keep people in them, and they allow for no innovation and no creativity. And for too many in Washington, the fidelity is to the programs, not to the outcomes. Our fidelity is not to a specific food program, for instance, but instead to the outcome – people having enough to eat.

The only way to stop this hardened structure of misaligned incentives is to allow states flexibility to apply anti-poverty dollars in ways that create the best outcomes for individuals and families at the bottom of the economic ladder.


Though we have little control over the actions of the federal government, we will be introducing a resolution in the Senate calling for our federal delegation to create and/or support legislation to send all anti-poverty funds to the states in the form of block grants each year. Justice Louis Brandeis, in his famous “states are the laboratories of democracy” speech, also said “[t]here must be power in the States and the nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs.” We couldn’t agree more. If given the ability to be flexible with major federal funding, we are certain that Delaware could creatively realign incentives for people to steadily work their way out of poverty.

That said, it is critical that block grants from the federal government contain ‘rails,’ or special provisions creating lockboxes that prohibit state governments from using those funds for anything other than strictly defined anti-poverty programs. Those ‘rails’ would serve as an impediment to any efforts by the state to use those funds for other purposes, or to balance the annual budget. We must guarantee, in exchange for the flexibility, that anti-poverty federal block grant dollars will be used exclusively for anti-poverty purposes.

Though we will be calling on the federal government to switch to this structure, and we believe that the flexibility created by a block grant funding structure would accelerate the reduction of poverty in Delaware, we can’t simply wait for Congress to take action. Therefore, the following items in our Agenda are all actionable at the state level right now.

In fact, the next two items on are agenda are already underway in a bipartisan fashion.  We look forward to working with elected officials of all stripes in pushing this agenda forward.


The Earned Income Tax Credit (EITC) is recognized by both Democrats and Republicans as one of the best anti-poverty tools we have. In its simplest form, the EITC rewards the poorest working people with a tax cut. In the process of compiling this agenda, we quickly identified as an effective tool, and slated it to be included. In the meantime, Democratic Rep. Paul Baumbach created legislation to make the EITC refundable in Delaware at a rate of 6% of the federal EITC. A good idea is a good idea, no matter where it comes from, therefore many members of our Senate Republican caucus signed on to cosponsor the legislation, and we will encourage its passage in the Senate.


Just 5% of jobs in 1950 required a license from the government. Today, that number is nearly 30% and growing rapidly. Many of those licenses are required in industries that pose little to no risk to the public. Unfortunately, low-income jobs are too often affected by these burdensome regulations. There are 49 separate low-income occupations in Delaware that require licensure, including cosmetologists and barbers. We agree with a recent report from the Obama White House that states, “…licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars.”

We feel that a robust review of the necessity of these licensure requirements is due, but instead of offering legislation at this time, we have pledged to work with Governor Markell on the issue following his statement in the State of the State address to focus on occupational licensing reform. We have already had productive conversations with the Governor’s staff and aim to continue playing an active role in that process, so that people at the low end of the economic ladder have every opportunity to move up.


As governments grow larger and larger, we tend to measure our performance by focusing on the amount of money in the budget we direct at certain areas. Anti-poverty programs are regularly renewed and regularly see increases based simply on demand and need. Rarely, if ever, do we focus on the measured outcomes of these programs. An ideal government would be one that focuses nearly entirely on the measured outcomes of programs. The advent of ‘Pay For Success’ financing and Social Impact Bonds represents a generational opportunity to revolutionize anti-poverty programs in Delaware.

‘Pay For Success’ (PFS) is an innovative funding mechanism underway in a handful of states that creates a ‘win-win-win’ environment that increases outcomes while eliminating risk on the part of government. In a PFS program, private investors front the money for a ‘Social Impact Bond’ directed at funding a program with specific measurable goals (i.e. reduce recidivism by 5% in four years). Should the program prove successful, the government then pays the investors with interest. The government carries no risk, and even after the interest is paid, saves money. The investors, who are often large charitable foundations, shoulder the risk in exchange for financial rewards. If successful, they now have more money to put into the next program.

On February 16, 2016, both the Democratic Governor of Connecticut and the Republican Governor of South Carolina announced PFS programs for their states, joining six other states and many counties and municipalities who are exploring this innovative form of financing. Governor Malloy’s project in Connecticut will address drug addiction, supporting new treatment teams delivering Family-Based Recovery (FBR) to families in need. Governor Haley’s project in South Carolina is aimed at improving health outcomes for mothers and children living in poverty through home-based nursing visits. Both projects are measurable and funded through a public-private PFS formula.

Our legislation will create a Task Force to vigorously study this form of financing to pay for social programs.  We believe a focus on outcomes is the paradigm shift our state government desperately needs at this time. Innovation and big ideas like PFS are critical to making important changes as to how we govern in Delaware, but equally important are making minor changes that will greatly affect Delawareans, especially those in poverty.

We feel that recidivism is a significant contributor to persistent poverty, and an equally significant cost driver for state government. Given that we know the cost of housing a prisoner, and therefore know specifically the cost savings of anti-recidivism programs, we feel that this area would be an excellent starting point for PFS financing in Delaware.


One of the areas in which we can greatly improve the quality of life for Delawareans in poverty, and springboard them toward a brighter future, is in housing. The lack of stable housing holds back the poor in measurable ways: children perform worse in school; parents have trouble finding work with no mailing address; and families suffer because they have no security.

While the government can’t be all things to all people, there has been great success in the recent past by focusing on housing. In fact, President George W. Bush’s “housing first” program helped reduce chronic homelessness by around 30% from 2005 to 2007. And in Delaware, we have a strong sector of nonprofits focused on housing those who need it. Organizations like Milford Housing Development Corporation, our Habitat for Humanity Chapters and others work with families to create permanent housing, and groups like Family Promise work to provide temporary housing for those in immediate need. We’ve seen the benefits that housing can have on ending multi-generational poverty, and these hardworking Delaware organizations are having a large impact.

We will create a $500,000 Poverty Housing Tax Credit modeled after the Neighborhood Assistance Act Tax Credit, which applies to those who provide “neighborhood assistance both directly and by contributing to neighborhood organizations, to benefit individuals living in impoverished areas or low and moderate income families.” While housing is one category of need listed in the Neighborhood Assistance Act Tax Credit, we feel that the importance of housing as a basis for reducing poverty justifies the creation of its own tax credit. The positive impact on the budget that comes from permanently housing families greatly outweighs the temporary reduction in state revenue.


Stable housing is critical for the here and now, but the most effective way to end multi-generational poverty is through education. Increasing educational opportunities for our poorest children is paramount to their escape from poverty.

One way to increase educational options for students in poverty is by incentivizing Delawareans to help those students go to the school of their choice, whether that school is public or private. At least 16 states have some form of “scholarship tax credit,” where an individual or an organization receives a tax credit for donating to a nonprofit that funds scholarships for low-income students to attend private school. Delaware should be one of those states. This legislation would create that tax credit, limited to $25,000 per individual or business and capped at $1,000,000 total for the first year.


While education is the key step to ending inter-generational poverty, not everyone completes the educational process. Though some people emerge unskilled and with no degree, those Delawareans are valued members of society with much to offer. For them, workforce training is a must, and it is critical that the training match the jobs of today and tomorrow.

For many decades, we have layered program upon program, with very little focus on measured outcomes. In fact, it is extremely difficult to even determine how many different government-funded workforce training programs exist in Delaware. Therefore, the time has come for a review commission to study our workforce training programs with questions like these: Are our programs measurable? Are they being measured? How much duplication of programming is occurring? Are there areas of need that aren’t being addressed? Are programs training for the future or the past? Can we provide better training for less money? The first step in reforming our training is a full vetting of the information available. Our legislation will create a committee to study these and other questions and make recommendations for actionable change.


In the modern era, training can be found in a multitude of places. Zip Code Wilmington teaches Delawareans to code in Java in an intense, 12-week program. Students emerge from this program with vastly increased earning potential, and the first class of the program resulted in 100% employment. Other programs exist throughout the state that are both attainable and would immediately put a family on the path out of poverty. One example is the Commercial Transportation Certificate program at Delaware Tech, which in a short time prepares individuals to drive a commercial hauler – a good-paying job that is in need in this economy. Our legislation would create a tax credit for companies that pay for certified external training for long-term unemployed Delawareans whose household income is beneath the poverty line. The credit would cover the cost of training up to $5,000, with an annual cap of $1,000,000.


Sometimes the best training is not external, but exists inside the operation. On-the-job training that provides a marketable skill is extremely valuable to both the employee and the state. Once a marketable skill is obtained, the chances of an individual slipping back into poverty are considerably reduced. Our legislation would create a $5,000 tax credit covering the first year of a newly hired apprentice who lives below the poverty line, has been unemployed for six months or longer and/or is newly released from prison. The annual cap for the tax credit would be $1,000,000.


Another method of funding training would be to allow the state’s SEED (Student Excellence Equals Degree) funding and similar programs to be used for certified training outside the walls of our state’s colleges and universities. As we stated previously, traditional education is a great path forward. However, there are plenty of non-college programs that provide a marketable skill. Students at successful training programs like Zip Code Wilmington should be eligible for state funding as well.


While workforce training is valuable, sometimes a person has the training they need, and has the entrepreneurial motivation, but simply needs the government to get out of the way so they can unleash their talents directly into the economy.

In 2012, California reformed their food regulations to create a “cottage food” industry, simply by allowing “non-hazardous” food producers like bakers to use their home kitchens for production. As a result, 1,200 new businesses and thousands of jobs were created. Our legislation would follow suit, allowing home producers to operate with a license requiring that producers complete a food safety certification course and carry proper amounts of insurance.  This represents a wonderful opportunity for families, including those in poverty, to create a side business and add income to the family budget. And over time, this initiative would increase the probability that one of those home-based businesses “takes off” and becomes an employer of hundreds of Delawareans.


It is our goal to see Delaware become the lowest-poverty state by the year 2024, and we believe that action on these agenda items will increase our chances to meet that goal while reducing government spending in the long run.

In addition to the specific legislative items mentioned in this document, there are many other ideas that are not actionable in the same light, but that are worth mentioning. This document is a beginning, not an ending. We will continue the conversation as these bills are introduced and in the years to come. We look forward to robust discussion with the rest of the General Assembly and the Governor, and stand willing to work together to move this agenda forward. These low-income Delaware families deserve our best effort, and together we can make Delaware the ‘First State’ in moving people from government-supported poverty to complete self-sufficiency.

25 Comments on "Poverty"

  1. Pat Fish says:

    These are great ideas. I heard Senator Pettyjohn on the radio yesterday discussing this plan.

    Let’s see how the Democrats say NO!

    Because they don’t really want to reduce poverty, do they?

  2. Rick says:

    The Socialist-Democrats need poverty because they need voters. It works like this; promise ever-expanding “social programs” in exchange for votes. It’s worked quite well in the urban black community. The Socialist-Democrats stay in the Big House and the beneficiaries of their largesse stay on the Plantation. Yet, the Republicans are “racist.” LOL

  3. mouse says:

    Tax credits for poor people. Got to love it lol

  4. Frank Knotts says:

    I will ask, what may be a stupid question. I thought if you were below the poverty level, you didn’t pay taxes. How much more credit can you get?

  5. Bob Mitchell says:

    Good question, Frank.
    The Earned Income Tax Credit (EITC), is a “Refundable” Tax credit on the Federal side. This means that even if you had $0 withheld in Federal Taxes, you can still receive a tax “refund” of over $6000 if you have up to 3 qualifying dependant children.
    I have seen tax returns where people made approximately $15,000 in income – of which $0.00 was taken out for any taxes. They then received a Federal Tax “Refund” of $7,200… (the max limits have been slightly reduced recently). The State EITC is a tax credit, but is not currently a “refundable” credit – meaning that it can only be used to lower your State tax burden down to $0.00, but you cannot get a “refund” if you did not pay anything in state income tax.
    One of the main concerns with the EITC being refundable is that the Internal Revenue Service – which was designed to be an income Collection Agency for the government – is now used as an income Redistribution Agency. There is no counseling given to the recipient on how to best use this windfall, no determination of need by an agency – it’s just a large lump sum of money given all at one time, and called a “refund” – even though many paid nothing in. It is a “silent” social welfare program that many know nothing about.
    The EITC is heralded as lifting families out of poverty – claiming to increase their monthly income; however, the fact that it is distributed in one lump sum often results in poor financial decisions and does not have the desired effect 2 or 3 months down the road. While there would be some additional cost to the program, many feel that a monthly or quarterly distribution would be a better way of helping a family throughout the year.
    The proposal in Delaware is to make the state EITC refundable at 6% of what the Federal credit is.

  6. Boobie says:

    Shorter Bob Mitchell: poor people are stupid and can’t be trusted. Wonderful. Would love to see some evidence of widespread “poor financial decisions” from EITC payments.

    The EITC rewards poor people who work. It is a work incentive, instead of a handout for not working. Conservative economists like Milton Friedman advocated for it for years as an alternative to handouts. Also, poor working people pay payroll taxes on every dollar of income, so they still pay more in taxes than they get back in all but the most extreme situations.

    And the idea that the IRS doesn’t redistribute income already is hilarious. Every tax credit, tax incentive, loophole and deduction has the same effect, much more of which goes up than down.

  7. Bob Mitchell says:

    I reread my post and nowhere did I insinuate that “poor people are stupid or can’t be trusted.”
    I’ve worked in Finance for the last 28 years – specifically mortgage financing for the last 20. I look at personal income tax returns every single day. And yes, I’ve personally seen how the large lump sum was gone within 60 days and there was little to no impact of it after that initial period. I’ve also seen where it helps immensely for those who stretch it out. And I’ve seen families use it for a down payment on a home that they otherwise would not be able to purchase. So it has its advantages as well.
    The one case that I referred to paid $0.00 in any tax (no payroll tax paid at all, no state, and no Social Security – essentially self employed).
    And while tax deductions and “loopholes” are ways to reduce one’s tax burden, getting a refund of less than or equal to what you paid in is not “redistributing” income – its simply getting back Your money that You paid too much of. A “refundable tax credit” which allows you to get back more than you paid in is a redistribution.
    Finally, the EITC does encourage work – absolutely. However, it has been in place for 41 years (1975), giving up to 45% of someone’s to them in a “refund” (WAY above any and all payroll tax collected). Currently it gives around $70 Billion annually and fraud is rampant in the system – yes, I’ve personally seen it. Looking at and analyzing personal and business income is what I have done for 28 years – that’s why I responded to Frank’s question.

  8. Brock Landers says:

    How about raising the minimum wage to a non poverty level? That would be much simpler and less convoluted.

    When a business person pays poverty level wages they are expressing how they value their work and they allow the taxpayer to subsidize their labor costs. Talk about welfare queens.

  9. Frank Knotts says:

    So it seems that Bob is in favor of growing the size and scope of government, when he says, “There is no counseling given to the recipient on how to best use this windfall, no determination of need by an agency”. And would increase the cost to tax payers to implement such a counseling program by this statement, “While there would be some additional cost to the program, many feel that a monthly or quarterly distribution would be a better way of helping a family throughout the year.”
    So it seems that he would add another layer of government, more authority to the IRS, and raise taxes to do it.
    I didn’t see where Bob said anything about doing away with the EITC, only how to increase the process of it. Of course as he has said right here, he has profited from it when people use it to get a mortgage from his employer.
    But Bob, I do have to ask, how often do you see people who are below the poverty level applying for mortgages?
    Finally Bob, you made this statement, “Finally, the EITC does encourage work – absolutely. However, it has been in place for 41 years (1975), giving up to 45% of someone’s to them in a “refund” (WAY above any and all payroll tax collected). ”
    Could you help us out here, and link to where you got the “45%” statistic? Thanks.

  10. Boobie says:

    It’s always easy to find the worst case scenario to make something look like a bad idea, but that’s not anyone’s idea of an intellectually sound argument. Also, it is I nteresting that Bob cites his own experience, which no one can verify, to justify his argument. And your opinion on tax redistribution is incredibly weak. The federal tax system is entirely about redistribution. The money goes in and they decide who gets it, whether that’s transfer payments, mortgage deductions or tax expenditures. Social Security is a generational transfer of wealth. Are we even having this discussion?

  11. Boobie says:

    And that was my question too: how many people getting a sizable EITC refund are applying for mortgages?

  12. Bob Mitchell says:

    There is quite a bit of information, both positive and negative, on the EITC available on the web. http://www.nationalaffairs.com/publications/detail/overselling-the-earned-income-tax-credit
    And this is only a few.
    On the issue of increasing the size/cost of Government, if the amount of fraud in the EITC could be reduced (it will never be eliminated), the savings vs cost could effectively be a wash.
    I cite my own experience because, well…. that’s all anyone can truly speak from…
    While the Federal Government is all about redistribution, my comment was that the purpose of the Internal Revenue Service is to determine and collect the amount of taxes a person or entity should pay in income taxes, not redistribute those funds.
    The EITC is a credit given to working parents (both single and married) and the annual income limits can exceed $50,000. So certainly, I have helped many individual buyers purchase homes with incomes well below those levels. Additionally, where it is more evident is when 2 unmarried individuals purchase a home together and 1 has children and a lower income. That individual would receive the larger EITC refund for down payment/closing costs purposes and when combined with the other borrower’s income, they qualify more easily. As the majority of my lending over the years has been in Western Sussex, thankfully the lower home prices have enabled many lower income families to become homeowners.
    I reread my post again, and I simply pointed out some of the concerns that many people have with the EITC (both within and outside of the Government). It helps working families – absolutely. My question are, could it be administered more efficiently (with less fraud) and with a payout over the year rather than one large sum? There are points to be made on both sides. The EITC is currently not a refundable credit for Delaware taxes. As we are looking to change that, and since Frank was completely unaware of its existence, I simply answered his question and brought out that there are some concerns with it. Frank somehow insinuates that I have “profited” from the EITC, which, once again, exposes his lack of understanding when it comes to government financial matters and his negative spinning of anything that I might say simply because of his unrelenting opposition to my campaign for State Representative. So be it. I don’t claim to have all of the answers – but I am not afraid to ask the questions. Our State and Federal government has been doing the same things over and over, yet expecting different results. I applaud this Caucus to address the issue of poverty. Is a State refundable EITC a way to help this cause? It may be. But my hope is that, in whatever we do, we maximize it’s effectiveness and minimize fraud/waste. That is, after all, one of our Legislators’ responsibilities.

  13. Frank Knotts says:

    Bob, thanks for the links, will read at my leisure, just take note, more than two links in one comment sends you to moderation automatically. Sorry for the delay approving this one.
    Also, the question wasn’t how many people receiving the EITC do you see seeking mortgages? The question was how many people under the poverty level do you see seeking mortgages?
    I believe the poverty level for a married couple, with one child under eighteen, is somewhere around $18,000, or it may be lower now. So how many people with $18,000 income qualify for a mortgage with you Bob? And aren’t the risky loans what sent us into the great recession in 2008?
    As for my first question about tax credits, was, “I will ask, what may be a stupid question. I thought if you were below the poverty level, you didn’t pay taxes. How much more credit can you get?”
    Bob, learn to read and read to learn, this is what is known as a “rhetorical question”.
    “1. used for, belonging to, or concerned with mere style or effect. ”
    Then Bob says, “Frank somehow insinuates that I have “profited” from the EITC, “, well Bob you did write this above, “And I’ve seen families use it for a down payment on a home that they otherwise would not be able to purchase. So it has its advantages as well.”
    I’m sorry Bob, I assumed that since you keep referencing personal experiences from your work in the mortgage business, that this case was one that you had handled, meaning you were getting paid for doing your job, and if the people in your relatable hadn’t gotten the EITC, as you say,” they otherwise would not be able to purchase”, a home, then you profited from them receiving the EITC. No?
    And now for political 101 for Bob Mitchell. Bob says, “and his negative spinning of anything that I might say simply because of his unrelenting opposition to my campaign for State Representative”.
    Bob, is that whining I hear? You have chosen to run for public office, you have chosen to put your opinions out there as being a possible answer for problems. And yet, you are whining about some local blogger being critical of you? What’s the matter Bob? Can’t take it?
    Bob, this campaign is personal for me, you are asking to be “MY” Representative, and yes I oppose your campaign. Hum? I thought this was still America, where we were free to support and oppose our political leaders and those seeking to be.
    And if you are going to come here and promote your campaign on an unrelated thread, I have to issue a warning, please stay on topic on the individual threads, it becomes confusing for the readers if you “Ayotte” the site. If there is a post about your campaign feel free to comment, and as you have done here, feel free to comment on any topic that is relevant to the post.
    But if you are simply going to whine about your rough treatment?

  14. Bob Mitchell says:

    Sorry about the links – wasn’t aware of the policy, but it certainly makes sense. And I truly appreciate the dialog your site allows.
    No whining at all… simply putting some of your comments in perspective… absolutely you are entitled to oppose my campaign. I just hope that you wouldn’t automatically dismiss all of my ideas simply because they come from me, but that you would objectively look at each.
    I am certain that many EITC recipients have used the money for propane delivery and hvac services, so should I somehow negatively insinuate that you “profited” from the funds? Or what about the grocer? Auto insurer? Electricity providers? And so on. Of course not. You see, if the tax credit is used as designed, then the family benefits and so does the local economy. However, I have seen it used to purchase $600 phones whice are worthless 3 months later because they cannot afford the calling plan. I know of cases where it was lost completely at a casino or where large parties were thrown and the following month there is no money to pay for gas for their car. The purpose of the EITC is to help families – specifically children (the EITC is only for those with dependant children). So is it wrong to ask the question, “Can it be better administered to ensure lower fraud and maximum effectiveness for children?” That’s all. Headed to church – enjoy this windy day!

  15. Boobie says:

    For the record, a $600 phone purchase with an EITC credit is not fraud, simply a bad decision. If Delaware makes the EITC refundable, the maximum possible payment would be in the $350 range, and the average payment would be in the $140 range. Of course not everyone would make the right choices with the money — just like so many people took out bad mortgages in the 2000s — but most would, and the intent is to help those who need it. In addition, this bill changes Delaware’s EITC plan. Currently, the state pays up to 20% of the federal EITC, but it is not refundable. So the state could reduce someone’s tax bill up to $1,200. This bill reduces that rate to 6%, but makes it refundable. So this bill is revenue-neutral to the state in its first year. It will also incentivize more people to claim the federal EITC, which currently brings more than $170 million per year back from Washington.

  16. Frank Knotts says:

    Bob, I am sorry if you perceive all debate as “negative” simply because it is counter to your views. I almost wish I could see you debate on the actual floor of the House, but alas, that is unlikely to happen.
    I said, “I didn’t see where Bob said anything about doing away with the EITC, only how to increase the process of it. Of course as he has said right here, he has profited from it when people use it to get a mortgage from his employer.”
    You see, it is easy to make something seem like something else, if taken out of context. No where did I say profit was bad, what I said was, your opinion of the EITC, might be clouded by the fact that you personally profit from its use. Which in the real world is not a bad thing. Unfortunately, you have decided to run for office to represent other people’s concerns.
    You statement, that increasing the cost of the process to taxpayers as a benefit , seems from my point of view to be counter to what you have said about cutting cost in Dover. Or is it a matter of cutting what you don’t like, to support that which you do favor?
    Now I would draw your attention to this statement in your last comment. ” You see, if the tax credit is used as designed, then the family benefits and so does the local economy.”
    Now hold up Bob. You have stated earlier here that this so called credit, in many cases, is far and above any payroll taxes paid in by the recipient. So that means, this is tax dollars taken from others, or as you described it above, wealth redistribution. So I am confused, do you support taking money from working people and giving it to others simply because they don’t make as much, or are you against it only because people who receive it don’t use it the way you think they should, and would impose more regulations on it?
    And tell me how the local economy benefits by taking dollars from one pocket, and putting those dollars in someone else’s pocket? Aren’t they the same dollars?
    So can I assume by this statement, that you believe that the government should be a financial advisor as well? “However, I have seen it used to purchase $600 phones whice are worthless 3 months later because they cannot afford the calling plan. I know of cases where it was lost completely at a casino or where large parties were thrown and the following month there is no money to pay for gas for their car. ”
    So again, you are not against the EITC, you simply want to be one of the people, who get to tell others how to use it, per government regulations.
    Just sounds like another “big government conservative” idea.

  17. Frank Knotts says:

    Boobie, I would ask you the same question, what is the benefit of taking my money and giving it to someone who has not paid into the process? Yes bringing dollars back to the state is a marginally good thing, but they had to be taken first, and we only get back a small % of what we send. But the fact that this money is being taken by the Feds from one person, and given to another person, is as Bob said, wealth redistribution, even though Bob doesn’t seem to be against it, he just wants to tweak it.
    And to call taking my money and giving it to someone else, “NUETRAL”, anything,is a bit of a stretch.

  18. delacrat says:

    “what is the benefit of taking my money and giving it to someone who has not paid into the process?” – frank


    Your money is not being taken. The EITC is paid by the Federal government which continuously creates new money and then spends it into the economy in the forms of EITC, Soc. Sec, bankster bailouts and bullshit wars….etc etc.

  19. Bob Mitchell says:

    Frank – I enjoy discussion/debate. It’s the only real way to adequately view an issue from all sides.
    Boobie – you are absolutely correct that a bad financial decision is not fraud. Unfortunately both occur in reference to the EITC. Fraud occurs by people claiming the tax credit who don’t qualify, but by the time it is discovered by the IRS, the check has been issued and cashed. Also (and yes, I have seen this personally) where a married family of more than three children will both file as “single” in order to get a credit for the additional children. The Internal Revenue Service reports that the EITC error and fraud rate in 2014 was 27 percent, which amounted to $18 billion in overpayments. That’s alot of money! If the payout was over the course of the year, much of that fraud could be detected and additional payments stopped before it was too late. And if additional safeguards could be put in place to prevent this fraud (as I mentioned before), the savings would offset any additional costs.
    The debate on how much the EITC helps and the validity of its success has been going on for years. There is no doubt that it will continue to be debated and see changes made. And to address your comment, Frank, if the Government is taking from one group of people and giving it to another, I believe that taking steps to ensure that the purpose for the redistribution is absolutely appropriate. This is not simply a refund of an overpayment – it’s the largest federal cash transfer program for low-income households, per the CATO Institute. As such, I would hope that it is being administered as wisely as possible.

  20. Bob Mitchell says:

    Correction: “And to address your comment, Frank, if the Government is taking from one group of people and giving it to another, I believe that taking steps to ensure that the purpose for the redistribution is achieved is absolutely appropriate.”

  21. Boobie says:

    “And to call taking my money and giving it to someone else, “NUETRAL”, anything,is a bit of a stretch.”

    If the bill passes, the state will pay the same amount in ETIC payments as it paid this year. That is the exact definition of neutral.

    “Boobie, I would ask you the same question, what is the benefit of taking my money and giving it to someone who has not paid into the process?”

    What is the benefit of spending trillions on war? What is the benefit of allowing hedge fund managers to pay taxes at the ‘carried interest’ rate? What is the benefit of tax inversions? Or the mortgage deduction? Or capital gains tax rates?

    The short answer is that it incentivizes poor people to work rather than to simply sit home and collect government payments. It brings about 6 million people out of poverty every year. If you agree that it is in our interest to help the poor, whether you feel that way because you were once poor and needed help, or because Jesus said so, or because you feel it’s just the right thing to do, there don’t seem to be many better ways to do it.

  22. mouse says:

    Are there no prisons, are there no workhouses?

  23. Frank Knotts says:

    Mouse, “Bah, humbug!”
    Bob said, ” if the Government is taking from one group of people and giving it to another, I believe that taking steps to ensure that the purpose for the redistribution is achieved is absolutely appropriate.”
    You see Bob, you are still talking about how to make it work, not about doing away with it.
    It seems big government is okay, as long as you are running the big government. You actually said, “the redistribution is achieved is absolutely appropriate”.
    Really Bob? And who gets to decide what is appropriate use of my money? Which was taken from me against my will.
    It would seem that you are running for office, so that you can increase regulation and the size of government.
    Boobie, this comment, “And to call taking my money and giving it to someone else, “NUETRAL”, was meant as sarcasm. I didn’t say anything about the EITC, I said taking my money against my will, was not neutral. Because it has an effect upon my life.
    You asked the question, “What is the benefit of spending trillions on war? What is the benefit of allowing hedge fund managers to pay taxes at the ‘carried interest’ rate? What is the benefit of tax inversions? Or the mortgage deduction? Or capital gains tax rates?”
    All good questions. Just because we, as a nation, have allowed our tax code to become behemoth in size and appetite, does not mean, we should never try to tame the beast.
    If you continue to feed an animal, its appetite will grow, and it will grow slow and lazy. Sound familiar. The way to incentivize, is to starve the beast. The problem is that the agencies believe the only way to protect their jobs is to have more and more people in the system, in any way.
    If instead the agency’s focus was to remove more people from the system, then we would see the agents, working harder to find way to remove people from the system. If the goal was no one in the system, rather than everyone in the system, we would save tax dollars as the need for government workers decreased. We could use the last man out the door idea. You treat the state employees as being in the system, as the need diminishes, the state employees who are let go, are handled just like everyone else in the system. And the last man out the door, turns off the lights.
    That is a positive solution, in my opinion.

  24. mouse says:

    And corporate and wealthy folk control even more than they do now

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