May 13, 2020
by Rob Roper
As Vermonters and the businesses that employ us struggle to get back to some sort of economic normalcy, the Vermont House Ways & Means Committee is contemplating raising $167 millions in new taxes to offset lost revenue for the Education Fund. The total budget hole is expected to be over $400 million. Filling these gaps with new or increased taxes is equivalent of throwing an anvil to a drowning man. Telling Vermonters who have lost their jobs, burned through savings, perhaps gone into debt to survive the government response to COVID-19 that even more is expected of them via confiscatory taxes is unacceptable.
Here’s a list of the possibilities discussed during the Ways & Means committee’s May 7th Zoom meeting:
- Raise the Sales Tax. Rep. George Till (D-Jericho), proposed creating a special, temporary COVID sales tax “surcharge”. Each penny increase above the current 6% level would extract roughly $60 million from Vermonters. And, not for nothing, the last temporary increase of the state sales tax is still in place. Increasing the cost to buy things for people who have who have lost months’ worth of income seems especially cruel.
- Expand the Sales Tax to Services. Rep. Till also brought up the idea of expanding the state sales tax to services. Again, this would mean increasing the cost of living for people who have lost significant amounts of income. It would also mean hair salons, carpenters, landscapers, etc. trying to get customers back would have to charge more, and assume a new record keeping/reporting burden at the same time.
- “Cloud” Tax. Rep. Janet Ancel (D-Calais), chair of the committee, suggested a “Cloud Tax” online software stored and accessed on the internet (such as, ironically, TuboTax), a sentiment echoed by Rep. Peter Anthony (D-Barre City). A similar proposal last year that would have raised $6 million was ultimately killed (and not for the first time) because it would clearly discourage high-paying, tech-oriented jobs from coming to, staying in, or expanding in Vermont. And we kind of want those.
- Tobacco tax increase. Rep. George Till (D-Jericho) suggested increased tobacco taxes by another $1 per pack (total $6.7 million increase). The state tax is already $3.85 on a pack of 25 cigarettes, raising it to $4.85 would really be a case of highly regressive of COVID tax gouging.
- Candy Tax. Another Till favorite, a candy tax that would extract $3 million. This is a very complicated tax for retailers as the definition of “candy” is not cut and dry.
- Sugar Sweetened Beverage Tax. Till again… $25 million extracted from taxes on soda and other drinks.
- Tax on Clothing. Rep. Robin Schue (D-Middlebury) suggested taxing “luxury” clothing over $150. Currently clothing, deemed a necessity like food, is not taxed in Vermont.
- Raise the Beer tax. This one suggested by Rep. Emily Kornheiser (D/P-Brattleboro). Put that one on your campaign literature. I dare you!
If you’d like to hear the discussion for yourself, it takes place roughly between the 38 and 48 minute marks HERE.
— Rob Roper is president of the Ethan Allen Institute.
{ 16 comments… read them below or add one }
Taxes are already way out of control, we’ve been thinking about fleeing this state because of them for years. This will probably be the final nail.
I came to Vermont 12 years ago from NH and loved the state. Now I can’t wait to leave this commie place. It sucks and the Governor sucks too.
It appears Vermont needs a Tillectomy.
I was born and raised in Vermont and still have property there, but you charge me nearly 1.5x what a resident is taxed at in a ploy to get more out of a person when you’re not able to tax that persons income. I moved my company out of the state several years ago due to overtaxation and already listed my property for sale at a reduced rate just to be done and away from this toxic taxation state!!
Increasing taxes only sends more business and sales to nearby states, especially NH. The more VT taxes, the more other states and their residents profit. Increased taxes only hurt VT residents. Try increasing revenues by lowering taxes. Increase sales and service in VT. Dont encourage Vt residents to buy out of state and increase sales to out of staters.
It appears that as Vermont born and taxed out we will have to follow our kids and move out of our beloved home for more affordable digs.
I can just hear the N.H. legislature cheering every one of those VT tax proposals. When I lived in VT I did most of my shopping and gassing up in NH as I figured I paid more than my share of taxes in real estate and hidden taxes in utilities and heating oil and got darned little out of those taxes in services. As unbelievable as it sounds, it was actually worth it to drive the 70 miles round trip every two weeks for shopping and gas. The Vermont legislature just keeps shooting taxpayers in the foot every time they convene.
Last year my property taxes were increased 100% plus $600 as a kicker. I’m on the brink of throwing in the towel but who would want to buy in this state?
Here’s a novel idea: dump the income tax
Although I do not support raising tax rates in Vermont to pay for an overpriced education system I should point out that the excise tax on beer and wine is almost non existent having not been adjusted for years. The excise tax on a 12 oz can of beer, based on volume is 2.6 cents. If they doubled it you wouldn’t even notice it. The same can be said for the tax on wine. The excise tax on a bottle of wine (750ml) is 11 cents regardless of the price. So a $5 and a $50 bottle of wine have the same excise tax of 11cents. Where they get you is on a bottle of liquor. The excise tax on a 750 ml bottle of vodka, gin, scotch,rum, etc is $1.53. An $8 bottle of cheap vodka and a $100 bottle of scotch still have the same excise tax. If a bottle of wine were taxed based on it alcohol content , an equivalent rate to match a bottle of spirits, the rate on wine would have to quadruple. Why are spirits taxed so much higher in Vermont than beer or wine? Traditionally, the beer and wine industries have had great lobbyists. The liquor / spirits industry does not have a lobbyist in Montpelier. All these alcohol products are subject to the Vermont sales tax.
That bridge to West Leb looks better every day. The taxpayers of this state will continue getting screwed as long as the General Assembly is owned by the public employee unions and their elite Petri dish handmaidens. Going on 80 years here, and I’m discouraged and disappointed over the future of Vermont. How do you spell theme park?
Hey Rob, Dumb suggestion – how about REDUCING SPENDING????? Why is it the knee jerk reaction in Montelier is to go to the tax well every time there is a revenue short fall? At home, if we can’t afford it, WE DON’T BUY IT!!!!
Just how much do these loons think that they can squeeze out of the majority of taxpayers who are operating on a shoestring now? I’m waiting for one of the
legislators to come up with the plan of having employers just send our pay checks directly to Montpelier, who will take out what they want, and send the rest to us.
To quote the old philosopher, Forrest Gump, ‘stupid is as stupid does.’
When I had budget responsibility in a large company, my own company, state or federal government, the first step was to reduce the budget 10 percent or freeze it at last year’s level. Then leave it to the managers to allocate what and where they will take action. Suggest yoiu younger readers read C. Northcote Parkinson’s “Parkinson’s Law”
An effective approach is lower last years budget 10% (including staffing) and require justification for any increase.
Some things change. Not the way government grows.
Here a novel concept. How about we all agree to induce two friends who do not currently vote to do it. They can do it absentee if work or anti social tendencies have inhibited their voting till now. On top of that twist their arms to do the same to two of their friends, What VT and the country badly needs is a new set of legislators that are non-predatory to motivated successful people and business. Most of my business owner friends moved out ot VT years ago. I wonder why I am still here and every legislative session drives me closer to swimming the river or heading for warmer places for at least 6 months and 1 day.
Rob and John –
Why do my comments always await moderation and who does the moderating?
Not sure- Wordpress changed several things recently. We’ll try to figure it out.