The Tax Foundation released its annual State Business Climate rankings for 2022 last week. Overall, Vermont scored 2nd worst in New England at 43, behind only Connecticut at 47.
The Individual Income Tax ranking was 2nd highest in New England, behind only Connecticut, at 47. It gets a 31.2% weight in the overall score. This ranking looks at such items as the top marginal tax rate, the number of brackets, income recapture and double taxation of capital income.
Our Sales Tax rank was in the middle of the pack, 16th highest in the country, and lower than Connecticut and Rhode Island, but higher than Massachusetts, Maine and New Hampshire, which doesn’t have any sales tax. This accounts for 23.7% of the overall score. While the rank is based on the overall tax rank, local sales tax rates, remote seller protections, sales tax breadth and excise taxes are all included in the sales tax rank score.
Our Corporate Tax Rate was highest in the New England, the 43rd highest in the country, accounting for 20.9% of our overall score. The Corporate Tax Rate includes such areas as Global Low-Taxed Intangible Income, Net Interest limitation, Alternative Minimum Tax, Deductibility of Depletion, Gross Receipts Tax Deductions and tax credits.
Our property tax rate was 49th out of 50 states, behind only Connecticut. As a region, all of New England does abysmally, with the 6 New England states all falling in the top 10 highest property taxed states in the region. Luckily for New England, the property tax rate only gets a 14.4% weight in the overall score. The subindex includes property tax collections per capita, tax collections as a percent of personal incomes and capital stock taxes.
One silver lining: Vermont taxes unemployment insurance at a lower rate than any of our New England neighbors, and 15th lowest in the country. Unfortunately, this ranking only gets a 9.8% ranking in the overall score. Which makes sense, because potential movers are more likely to compare income taxes, rather than insurance taxes before they move.
For each of the past 8 years, Vermont has barely budged in the rankings, ranking #42 in 4 years and #43 in 4 of the years. As Vermont’s ARPA funds dry up, it will become even more important to make Vermont friendlier to business. Relying on federal funding is a very risky long-term play for the economy.
To read the Tax Foundation’s 2022 state Business Climate Index, click here.
David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.
10 thoughts on “Flemming: Vermont ranks 43rd in business tax climate”
Vermont ranks very high for unemployed people, but very dismal overall.
The most SOCIALIST state in the US makes sure to take care of the unemployed (to get their votes), but does not give a damn about owners of businesses, because they do not vote for Democrats.
Taxes are high and a real problem in Vermont……..But, an equally bad if not worse even problem than taxes is the impact of activists groups in the Green Mountain State. The sheer number and aggressiveness of activists groups in Vermont has a detrimental effect on Business Climate resulting in a drag on the State’s economy.
Think back to the activist attacks on Vermont Yankee that lead to that company’s decision to leave Vermont destroying more than 600 high paying jobs and harming local business that made a living from VY. VY was deemed to be safe by the Federal Government and the power it would have generated was clean and far less costly than wind and solar that the activists advocated for.
There are many more examples of harm done by activists groups over the years to include the most current and on going attacks on Global Foundries and its plan to generate its own electrical power, which is key to its operation.
While the activists groups in Vermont are attacking Global Foundries and its ability to operate efficiently, Samsung Electronics, a South Korean company has just announced it will invest $17 billion in a small town north of Austin, Texas. Samsung will manufacture semiconductor chips and create more than 2,000 high paying jobs.
Samsung choose Texas for its multi-billion investment because the State and local communities elected to work constructively with them. The process wasn’t overrun by activists groups opposed to responsible development……….This is something Vermont must learn how to do.
A great response, that will not be read, nor heeded by VT legislators.
They have no idea how to create a friendly private enterprise business climate, such as in New Hampshire and Texas. They have not done it for decades.
Their mind set is in Bernie la la land, the left lane.
Remember, Elon Musk moved from California to Texas, and moved his headquarters as well, because he was tired of idiot RE and climate bureaucrats telling him when and how to produce cars, etc.
California is loosing many $BILLIONS, plus the people outflow was nearly 200,000 in 2021, all due to idiots like Governor Newsom, who is part of the Pelosi clan.
Apparently, for those activists inclined to assume guilt for society’s perceived misgivings, a rigorous abstention from self-indulgence is the raison d’être for their being. For them, more often than not, the measure of their faith in humanity is the measure of the pain they are willing to endure. Unfortunately, for the rest of us not so inclined, their misery demands company.
But worse are the pretenders among these ascetics. They instigate rebellion and, in their false faith, personally profit by their pretense, then disappear into the darkness of anonymity.
What about the Vermont business-friendliness ranking towards RE companies?
It must be very high, because such RE businesses get all sorts of subsidies and coddling to help them “succeed” and be highly profitable. THEY ARE FIGHTING, mind you, on the front lines, exposed to danger, to combat climate change, i.e., fight the sun’s power; China, and India, etc., are helping out burning as much coal as possible, world-wide about 8 BILLION METRIC TON
The Vermont renewable energy industry now believes that Vermont is hostile to them and isn’t doing enough to promote the industry’s interests. Peter Sterling from Renewable Energy Vermont, just wrote a commentary published on the VTDigger complaining about how badly the State treats the wind and solar industry.
Over the past several years the renewable energy industry has: bullied the State and naive legislators; opposed responsible development and citing standards for wind/solar; marred Vermont’s beautiful roadways with large industrial solar developments; dynamited mountain tops for wind turbines; sued towns to force unwanted solar development; charged rates as high as 30 cents per KWH of solar power; failed to produce lower electricity rates for consumers as promised; failed to produce the thousands of high paying renewable energy jobs promised; and attacked home owners harmed by wind/solar development and those who advocated for them, but they did make millions of dollars for a small hand full solar developers.
The three primary things the renewable energy industry has managed to do in Vermont is increased the overall price of electricity (rates up for GMP customers), cover the state with countless acres of roadside solar development and make millions of dollars for investors, many of them out of staters
The renewable energy industry has failed to deliver on its promises and the State may hopefully wising up to its empty promises. As the State awakes, the renewable energy industry is not very happy as evidenced by Peter Sterling’s commentary cited above.
Proving yet again progressives can’t chew bubble gum and walk at the same
time… or in this case have a good business climate while fighting an invisible war
on climate… priorities you know..
I’m a little disappointed, I figured
with Vermont’s progressive fools
running the state and always wanting
to be #1 at everything, I thought for
sure we’d be 50 out of 50 !!
Vermont don’t worry, your elected
officials won’t let you down, just look
at the up coming legislation , Vermont
May be a blue state, but they’ll make
sure we are in the “RED” !!
Not that this is news, merely a reminder that Vermont’s politicians choose to lie about the Vermont business climate. Perhaps way back when Dick Snelling was governor and we had a majority republican legislature we might have been above the lowest percentile.
Thank you Frank. Exactly what I wanted to say. This is definitely NOT news of any sort. It is just a continuation of the Prog debilitating affect on the once proud state of Vermon.
Comments are closed.