Delaware Governor Gambles Economy With Punishing Tax Plan

Governor Matt Meyer took the stage at the New Castle County Chamber of Commerce, preaching a vision of a Delaware economy brimming with innovation and abundance. His speech, delivered to a packed room of business leaders, painted a picture of a state that champions small businesses and workforce training over the tired playbook of corporate welfare. It’s a message that resonates with those who believe in the power of Main Street over Wall Street. Yet, beneath the applause, a nagging question lingers: is this a blueprint for prosperity or a gamble that could stall Delaware’s economic engine?

At its core, Meyer’s plan pivots away from taxpayer-funded grants for big corporations, redirecting resources to small businesses and job training. It’s a refreshing nod to the backbone of America’s economy—small enterprises that create jobs and anchor communities. Delaware’s economy, with its low unemployment and diverse sectors like healthcare and logistics, seems ripe for this shift. But the devil’s in the details, and Meyer’s proposal to slap higher taxes on the state’s wealthiest residents raises red flags. Punishing success to fund government programs rarely ends well.

This isn’t just about Delaware. It’s a microcosm of a broader national debate: how to grow an economy without strangling the very engines of wealth creation. With President Trump back in the White House, pushing deregulation and tax cuts, Meyer’s approach feels like a defiant step in the opposite direction. The question is whether Delaware can afford to swim against the tide of a business-friendly federal agenda.

For those of us who value fiscal discipline and free markets, Meyer’s vision offers both promise and peril. The promise lies in empowering small businesses, the lifeblood of any thriving economy. The peril? A tax-and-spend mentality that could drive wealth and opportunity out of the state faster than you can say ‘business relocation.’

Delaware’s economy is no slouch. With a diversified base spanning professional services, healthcare, and transportation, the state enjoys a low unemployment rate and a strategic location that fuels growth in warehousing and logistics. Yet, job growth has been sluggish, clocking in at a mere 0.6% from 2023 to 2024, well below the national average. Meyer’s plan to double down on small businesses could be the jolt the state needs. After all, small enterprises account for nearly half of U.S. jobs and are often more resilient than corporate giants in tough times.

The federal government gets it. The State Small Business Credit Initiative, which has pumped nearly $10 billion into states and tribal governments, has already reached over 3,600 small businesses, supporting transactions that are expected to create or retain over 46,200 jobs. In Delaware, redirecting resources to similar programs could supercharge local entrepreneurs, especially in underserved communities. This aligns with a conservative belief in empowering individuals over bloated bureaucracies. Why funnel taxpayer dollars to multinational corporations when you can back the mom-and-pop shops that keep communities alive?

Contrast this with the old Delaware model: doling out hefty grants to big corporations in hopes they’ll stick around. History shows mixed results. The state’s Strategic Fund has lured businesses, sure, but at what cost? Taxpayer money shouldn’t be a corporate slot machine, rewarding firms that might bolt the moment a better deal comes along. Meyer’s shift toward small business support is a step toward accountability, ensuring public funds deliver tangible, local benefits.

Here’s where Meyer’s plan stumbles. His proposal to raise taxes on Delaware’s wealthiest residents is a classic move from the big-government playbook. The logic is seductive: soak the rich to fund programs for the rest. But economics isn’t a fairy tale. High taxes on wealth creators—business owners, investors, innovators—drive capital flight. Just look at states like California, where punitive tax policies have pushed businesses and high earners to friendlier climates like Texas and Florida. Delaware, already grappling with housing affordability and a declining labor force participation rate, can’t afford to scare off its economic heavyweights.

The data backs this up. Delaware’s home prices have surged 56.2% in just four years, squeezing the middle class and making it harder for businesses to attract talent. Adding a tax burden on top earners risks a vicious cycle: less investment, fewer jobs, and a weaker tax base. Meyer’s supporters might argue it’s about fairness, but fairness doesn’t fill state coffers when the wealthy pack up and leave. A 2024 study from the Tax Foundation warned that high state taxes correlate with reduced economic growth. Delaware, ranked 35th in innovation, needs to attract risk-takers, not push them away.

Meyer’s call for an innovation-driven economy is spot-on, but it doesn’t need a government-led crusade. Delaware’s future lies in fostering an environment where entrepreneurs can thrive without jumping through bureaucratic hoops. The state’s 2025–2030 Comprehensive Economic Development Strategy emphasizes public-private partnerships and workforce training—smart moves that leverage private sector ingenuity. Nationally, venture capital in AI and tech surged to $208 billion in 2024, proving the private sector is already betting big on innovation. Delaware doesn’t need to throw taxpayer money at startups; it needs to clear the regulatory brush and let the market work.

Historical precedent supports this. Delaware’s 1980s Financial Center Development Act didn’t rely on massive grants—it used targeted regulatory reforms to attract banks, boosting per capita income and diversifying the economy. Today, with AI and clean energy reshaping industries, Delaware could replicate that success by streamlining permitting and cutting red tape. Meyer’s focus on workforce training is a win, but it must prioritize practical skills over ivory-tower programs. Businesses need workers who can hit the ground running, not graduates drowning in theory.

Delaware stands at a crossroads. Meyer’s vision of abundance through small business and innovation has real potential, but it’s shackled to a tax policy that threatens to undermine it. A truly prosperous Delaware would pair his small-business focus with a commitment to fiscal restraint and a lighter regulatory touch. The federal landscape, with Republican control of Congress and the White House, offers a tailwind. Deregulation and tax reforms are on the horizon, and Delaware could ride that wave to attract businesses fleeing high-tax states.

The alternative—doubling down on tax hikes and government programs—risks repeating the mistakes of the past. States that prioritize free markets and individual initiative consistently outperform those bogged down by heavy-handed policies. Delaware’s own history, from its banking boom to its resilient small-business sector, proves the power of unleashing private enterprise. Meyer’s heart may be in the right place, but his plan needs a conservative course correction to deliver lasting prosperity.