The Rick Jensen Show State Rep Mike Smith explains why the Bill to Decouple Delaware from the Federal Tax Code can lead to greater financial damage to Delaware
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Nov 14, 2025 State Representative Mike Smith, a former aide to Governor Castle, dives into the critical debate over Delaware's potential decoupling from the federal tax code. He explains how federal depreciation benefits could stimulate the economy, yet Delaware risks losing corporations to more favorable states like Nevada and Texas. They explore the balance between short-term financial gains and potential long-term economic decline, emphasizing the importance of robust corporate tax revenues for state services. Mike urges listeners to actively oppose the decoupling bill before it's too late.
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State Has Built-In Revenue Buffers
- Delaware will finish the fiscal year with $46.6 million in unencumbered cash and a $469 million budget-smoothing fund.
- DFAC’s buffer and the 98% spending rule were designed to absorb federal revenue swings without emergency measures.
Depreciation Encourages Local R&D Investment
- Immediate bonus depreciation incentives spur firms to invest sooner, boosting R&D and local economic activity.
- Blocking those incentives risks slowing life sciences growth and sending a negative signal about Delaware's business climate.
Perception Shapes Corporate Decisions
- Short-term revenue estimates used by the administration look at a single slice of the fiscal picture, not the whole forecasting model.
- Changing tax rules now can create a perception that Delaware is less welcoming to business, which matters for incorporations and relocations.