Taxes & Spending: Blog Posts

EAI believes Vermont is spending money on government services at an unsustainable rate. In order to pay for these services, Vermonters are being asked to pay more in taxes and fees with each passing year. Taxation must be circumscribed and limited else it will “defeat and render useless the power to create.” By what principle should it be limited? There is a principle embedded in our system which provides inherent limits to all taxation. It is so basic to our political institutions that it should govern every legislator, every executive, and every judge. It precedes all our constitutions, all our laws, and all our political institutions. It brought them into existence; it sustains them; without it they are a nullity.


All Blog Posts

Two tax increases proposed to lessen pension crisis

When Vermont’s Legislature appointed the Pension Benefits, Design, and Funding Task Force, there was a good chance tax increases would be discussed at some point. Now, Vermonters have a little clearer idea of what those could look like.

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Thomas Jefferson and Public Debt

Thomas Jefferson was a fanatic on the subject of sound money. He viewed emissions of paper money with unmitigated horror.

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Dem Legislator Explains Why a Mortgage is a Bad Analogy for Pension Crisis

On October 6, Hank Kim, of the National Conference on Public Employee Retirement Systems testified in front of the Pension Benefits, Design, and Funding Task Force, which is responsible for finding a way to reduce Vermont’s massively underfunded state employee and teacher pensions.

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Guilt for Underfunded Pensions Lies with Legislature, Not Taxpayers

In testimony provided to the Pension, Benefits, Design and Funding Task Force on September 9, Paul Cillo, President of the Public Assets Institute, came to testify about the “fiscal issues related to the state’s public employee pension systems.” He suggested that “it’s irresponsible to not raise revenue” to pay for the pension underfunding crisis. According to Cillo, “Many Vermonters at the top, with much greater amounts of discretionary income, still pay less as a percentage of their income in state and local taxes than their lower-income neighbors, according to a 50-state analysis by the Institute on Taxation and Economic Policy” (a left-leaning think tank).

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Another Major Leak in the TCI Boat

When the folks at the Georgetown Climate Center put forward their memorandum of understanding for thirteen New England and Mid-Atlantic states to sign onto, it was a blow to the interstate carbon scheme that only three states (plus Washington DC) signed on. It was a further blow that in two of those states where the Governor gave the okay, Connecticut and Rhode Island, the left-leaning legislatures in both balked at adopting legislation that would actually allow their states to participate in TCI. So, as of now, they’re still out. That leaves Massachusetts, which does not require legislative approval to participate, as the only state left on the field. And now even Massachusetts’ participation in TCI is in jeopardy.

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Leahy’s Debt Limit Confusion

A fellow Vermonter shared with me Sen. Patrick  Leahy’s reply to his letter expressing concern about the national debt surpassing the value of the entire US economy.

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An Unsustainable Appetite for Spending

Steve Klein of the Joint Fiscal Office briefed the Pension and Benefits Task Force, which is looking into how to fix the state’s $6 billion unfunded pension liabilities, on the current state budget as well as impending budget pressures in the pipeline. Klein’s slide show revealed a frightening increase in spending with daunting implications for Vermont taxpayers.

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Can Vermont Follow New Hampshire's Tax Rate Reduction?

Drew Cline of the Josiah Bartlett Center in New Hampshire noted that New Hampshire’s Business Profits Tax rate was 8.5% in 2015, making it the third-highest corporate income tax in New England, after Maine and Connecticut.

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Sen. Clarkson’s Pension Report

I’m a believer in legislative bodies making reports to the citizens of what they have wrought in their just completed session. But last month’s report from Senate majority leader Alison Clarkson (D-Windsor Co.), struck me, in at least one important aspect, as indefensibly inflating two miniscule accomplishments.

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Property Tax Limits: a Modest Proposal from 46 States

Vermont has the 4th highest property tax rate in the country, at 1.76%, according to research from the Tax Foundation. We are second only to New Hampshire among the New England states, which has a property tax rate of 1.89% (New Hampshire however, has no income tax and no sales tax). We are one of only 4 states which don’t have place limitations on property tax hikes. Hawaii, New Hampshire and Tennessee are the others.

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Climate Council says the “C” word! Carbon Tax

During the July 8th meeting of the Vermont Climate Council’s Cross-Sector Mitigation Committee, the group started to delve into some of the details of what “the plan” to reduce the state’s greenhouse gas emissions might actually look like. In a nutshell, how you drive, heat your home, and heat your water are going to have to change. Needless to say, subsidizing multiple tens of thousands of Vermonters into electric vehicles, weatherizing many thousands of homes, and switching out existing heating systems for many more will cost a mountain of money.

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More Money, More Problems for Vermont Counties

Vermont’s 14 counties expect to receive $121 million ARPA federal stimulus funding, in proportion to their population. As discussed in a recent blog post, this will cause problems because Vermont’s county workers are few in number, without much experience in allocating federal dollars.

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8 VT Counties Expect Stimulus 10-26x their Annual Budgets

Some Vermont counties are set to get more money from the federal government in one year than they have gotten from Vermont taxpayers in the 21st century. Part of the Covid stimulus package involves the federal government allocating billions in ARPA stimulus funding to counties across the US, according to each county’s share of the U.S. population. Vermont’s counties are set to get $121 million directly funded to them. For reference, Vermont’s Legislature recently allocated $80 million of ARPA funding, despite some vocal disagreement from Governor Scott.

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Rep. George Till, Sales Tax on Services Champion

            A few days ago I received a copy of an email to a constituent from Rep. George Till, a member of the House Ways and Means Committee. The Committee is apparently discussing which if any of the recommendations of the Vermont Tax Structure Commission to enact.

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The “Cloud Tax” is Back! (And You Won’t Believe Where….)

For years, legislators on the left have been eager to tax so called “cloud” services, or, as the legal language refers to them, “specified digital products transferred electronically to an end user regardless of whether for permanent use or less than permanent use and regardless of whether or not conditioned upon continued payment from the purchaser; or - … vendor-hosted prewritten computer software and the right to access and use vendor-hosted prewritten computer software to perform data processing services.”

In English, think Spotify, Pandora, TurboTax, Adobe products, Microsoft Office, Netfilx, Hulu, etc. and so on ad infinitum.

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Bill Would Fine Contractors $5000 for “Unauthorized Practice”

The Vermont House will act on bill H.157 the week of April 5 to require every contractor to register with the state Office of Professional Regulation if the value of the work and  materials provided to a home owner amounts to $2500 or more.

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Vermont Ranks 41st in Taxpayer Return-On-Investment

Vermont ranked 41st out of 50 states, when it comes to taxpayers' return on investment (ROI). What Vermont taxpayers pay to Montpelier doesn’t get a great return relative to what taxpayers from most other states get.

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EAI Town Meeting Week Poll Results

During the Town Meeting Week break for the legislature, the Ethan Allen Institute commissioned a scientific poll (450 respondents) to gage where Vermonters are on some of the key issues under consideration.

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Legislators Debate Doubling and Expanding the Bottle Deposit

There is a proposal making its way through the Vermont House of Representatives to raise and expand Vermont’s bottle deposit law (H.175). The bill would double the cost of a standard bottle deposit from 5 cents to 10 cents, and it would apply the deposit to “water bottles, wine bottles and containers for all noncarbonated and carbonated drinks, except for milk, rice milk, soy milk, almond milk, hemp seed milk, and dairy products.” It would also create a 15 cent deposit requirement for liquor bottles.

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Robbing the Transportation Fund to Pay for “Green” Priorities

There is a bill currently before the House Transportation Committee, “An act relating to transportation initiatives to reduce carbon emissions” (H.94), that any Vermonter who has routinely experienced a miles-long, tooth-rattling ride over pot holes and frost heaves should be concerned about.

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Push Is On To Expand VT Sales Tax to Services

The Vermont Tax Structure Commission released its 180 page draft report to the legislature, and one of the major recommendations it makes is to expand Vermont’s 6% sales tax, currently limited to goods and a few singled out services such as ski rentals, to everything but healthcare, and to reduce the overall rate to 3.6%.

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Feds Gave Every Vermonter $7229 on Average in 2020

The Peterson Foundation, that tracks government spending, recently came up with a surprising result.

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Montpelier Spending May Soon Cost Taxpayers More Per $

S&P Global Ratings changed its outlook for two major types of bonds to negative last week. Vermont's general obligation debt and the Vermont State College bonds outstanding each had a “stable” outlook after being downgraded from AAA in 2018, but both were changed to a negative outlook after a press release last week.

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You Don’t Give Blood When You’re Bleeding

Yesterday the Vermont House of Representatives voted in favor of the Global Warming Solutions Act (GWSA), sending the controversial legislation to the Governor’s desk for either his signature or a veto stamp.

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Commentary: Recovery and Moving Forward

Vermonters battled their way out of the devastation of the 1927 flood.  But Vermont is now a far more expensive enterprise, that can’t be sustained when state revenues disappear. Spending $17,873 per K-12 pupil in public education is too much for next year’s taxpayers to pay, after the economic disaster of 2020. This hard fact will force us to rethink the whole question of how we educate our children

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