Roll Call! Senate Increases Capital Gains Tax (21-6), 2019

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PASSED
in the State House of Representatives
on May 24, 2019, by a vote of
21-6
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Purpose: The totality of the bill proposes to make numerous changes affecting the revenue of the State. The key provisions here include reducing the capital gains tax exclusion, increasing the estate tax exclusion. Other provisions include increasing downtown and village center and affordable housing tax credits and assistance from $2.4 million to $2.6 million, simplifying the lands gains tax, and clarifying the property transfer tax. 
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Analysis: In order to address the issue of wealthy taxpayers fleeing Vermont, this bill would increase the estate tax exclusion (moving higher the point where the tax kicks in) from $2.75 million to $4.25 million in January 2020, and to $5 million in January 2021, resulting in a substantial estate tax cut.  However, in order to backfill the lost revenue anticipated from the estate tax cut, the bill would also decrease the exemption for capital gains from 40% to 30%, and cap the exemption at $450,000. The former change positively impacts mostly wealthy citizens passing on assets to younger generations, the latter change negatively impacts mostly middle/working Vermonters who execute a one-time, large dollar sale of a home or business.
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Those voting YES support these changes in the belief that lowering the estate tax will keep wealthier Vermonters in state, which would have a positive impact on other revenue streams, such as the income tax and sales tax.
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Those voting NO believe that this is a cost shift of tax burden from mostly wealthy to mostly middle/working class Vermonters who rely on the one-time sale of a home or business to finance their retirement. This will also discourage entrepreneurs from starting businesses in Vermont if they know the value of the business they create will be severely reduced at sale by capital gains taxes.
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As Recorded in the House Journal, Friday, May 24, 2019: “Thereupon, the question, Shall the Senate accept and adopt the report of the Committee of Conference? was decided in the affirmative on a roll call, Yeas 21, Nays 6. Senator Lyons having demanded the yeas and nays…” (Read the Journal, p. 1747-1766.)

How They Voted

Timothy Ashe (D/P-Chittenden) – PRESIDING
Becca Balint (D-Windham) – YES
Philip Baruth (D-Chittenden) – NO
Joseph Benning (R-Caledonia) – YES
Christopher Bray (D-Addison) – YES
Randy Brock (R-Franklin) -YES
Brian Campion (D-Bennington) – YES
Alison Clarkson (D-Windsor) -YES
Brian Collamore (R-Rutland) – YES
Ann Cummings (D-Washington) – YES
Ruth Hardy (D-Addison) – YES
Cheryl Hooker (D-Rutland) – YES
Debbie Ingram (D-Chittenden) – NO
M. Jane Kitchel (D-Caledonia) – YES
Virginia Lyons (D-Chittenden) – NO
Mark MacDonald (D-Orange) – YES
Richard Mazza (D-Chittenden-Grand Isle) – YES
Richard McCormack (D-Windsor) – YES
James McNeil (R-Rutland) –  ABSENT
Alice Nitka (D-Windsor District) –  YES
Corey Parent (R-Franklin) – ABSENT
Chris Pearson (P-Chittenden) – NO
Andrew Perchlik (D-Washington) – YES
Anthony Pollina (P/D/W-Washington) – NO
John Rodgers (D-Essex-Orleans) – YES
Richard Sears (D-Bennington) – YES
Michael Sirotkin (D-Chittenden) – NO
Robert Starr (D-Essex-Orleans) – YES
Richard Westman (R-Lamoille) – YES
Jeanette White (D-Windham) – YES

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