Editor’s note: This commentary is by Deb Billado, chairwoman of the Vermont GOP.
In the latest reports for the state of Vermont, we learned that yet again revenue collections were ahead of expectations across all funds by $7.38 million. From the fiscal year to date, the General Fund (which pays for most government functions) is up $10.57 million and the Education Fund is up $450,000.
What’s the driving force among these stellar revenue collections that have exceeded economists’ predictions? The answer: higher personal and corporate income tax receipts driven by tax relief from Republicans at the federal level. While federal changes lowered the tax rate and increased the money in the taxpayer’s pocket, it also changed a component of federal personal tax structure that eliminated personal exemptions. These exemptions were “allowed deductions” by Vermont tax law and without a state fix, would have resulted in an “unintended distortion in taxpayers’ Vermont taxable income, even if their earnings stayed the same.” This was recognized by Vermont’s Governor who proposed the “Working Family Taxpayer Protection Act” in 2018, that made changes at the state level to ensure that such savings would not result in a “surprise” state tax increase on Vermonters.
As a result, according to the Legislative Joint Fiscal Office, personal income receipts are up $7.5 million and corporate income receipts are up $1.2 million over targets thanks to the above. These increases reflect the continued economic prosperity driven by provisions in President Trump’s TCJA (including personal and corporate income tax cuts).
Republicans have spearheaded these tax changes which have helped expand economic growth and improve both individual and business-level prosperity. Just imagine the additional positive effect on Vermonters if the liberal, Democrat/Progressive controlled legislature, would get their spending addiction under control? Not only would there be more money in the pockets at the end of the week for workers, but with the stimulus caused by these cuts, more sales, more jobs, more tax revenue for the state and a brighter future without limit for our Vermont. Such could be reality if Vermont voters return us with their vote in 2020 to those days of yesteryear when fiscally conservative Republicans properly managed state government and held government over-spending in check.
The 2020 election is coming and offers us a very real opportunity. Federal tax reforms benefit Vermont, but it could be even much better if Vermont’s political landscape map was once again painted rosy red!