4-28-14 – Vermont’s Business “Assessment”

by John McClaughry

Last Thursday the Senate Finance Committee turned to the most promising method of raising another $3.5 million dollars to try to balance next year’s general fund budget.

With this legislature, the question is not “where can he cut back spending to balance the budget”, but “where can we extract a few  million dollars more to balance the budget?”

Guess what Chairman Tim Ashe revealed to be the most promising target for tax increases: business! – in particular, the Catamount employer assessment. This tax on businesses was enacted in 2006 to finance Catamount Health for the uninsured. Last year the legislature dissolved Catamount Health into the new Vermont HealthConnect.

Did the legislature repeal the $14 million dollar Catamount tax when it repealed the insurance program? Of course not. They continued the tax and now want to increase it by another $3.5 million.

Vermont Digger reports that about 2,366 employers pay the assessment on 31,000 employees, according to estimates from the Joint Fiscal Office. Out of those totals, there are 1,853 small employers with 11,743 workers.

Sen. Ashe blandly said “The committee would prefer to make a slight adjustment in the employer assessment on companies that do not provide insurance for employees.”  Note: in Montpelier a “slight adjustment” in a tax rate is always upward.

This is one more demonstration that Vermont businesses are the ultimate cash cow for the big spenders now in power.

John McClaughry is the founder and current vice-president of the Ethan Allen Institute.

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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