By Rob Roper
If you just paid your Vermont state taxes and thought wow that was brutal, you’re not wrong. According to the Tax Foundation, in 2022 Vermont already had the 4th highest state and local tax burden in the country at 13.6 percent. But, oh, wait till next year!
Rob Roper
After winning veto-proof majorities in both chambers of the legislature this past November in an election largely focused on abortion rights, Vermont Democrats are now claiming mandates on just about every issue that ever sparked a glimmer in their eye from climate change, to childcare, to paid leave — you name it. This legislative session looks like a version of that old game show stunt where a contestant’s prize is to keep all the stuff they can pile into a shopping cart in ninety seconds. Only in this case Vermont taxpayers will be picking up the tab for all that loot.
The Vermont Chamber of Commerce calculated that our lawmakers are currently advancing $461 million in new, identifiable taxes and fees. This number does not include the as-of-yet unidentified costs of the Clean Heat Standard bill (S.5), which casual estimates put at around $500 million per year for the first four active years of the program (2026-2030).
Let’s put these numbers in context. Vermont’s overall budget for 2023 is $8.65 billion.
That is up from just under $6 billion in 2019, the last year before Covid federal emergency money flooded into state coffers. Vermont has always relied heavily on federal funds to pay our bills, and with the one-time pandemic infusions still trickling in this is more true than ever. At least half of that $8.6 billion is now coming from Washington, but this will not continue for much longer.
When that money is gone it will place more pressure on local taxpayers to keep funding programs set up with federal dollars. Witness the coming $30 million property tax increase to make permanent the pandemic policy of universal free school meals, and the $20 million to temporarily extend the program to house homeless in hotels.
So, the responsible thing to do here would be to keep whatever tax capacity powder we have left (if any) dry in anticipation of more situations like these and/or any emergencies arising from a predicted recession and revenue shortfall after 2024. But that’s not happening.
Instead, our elected representatives want to add around a $100 million per year payroll tax (0.55 percent out of every Vermonter’s paycheck) to pay for a new Paid Family Leave program. Another payroll tax of 0.42 percent ($114 million annually) will be added to pay for expanded childcare subsidies reaching families earning over $200,000 a year. Call that a total 1 percent payroll tax, and it means a median income household in Vermont will be paying a new, additional $677 tax on their income that will only go up over time. (It’s also yet another incentive for businesses to leave Vermont.)
Put on top of this the added property tax burden from the free meals program, an
estimated $500 (at least) per household “Clean Heat” fee for homes that burn oil, propane, gas, or kerosene, a twenty percent increase in DMV fees for license and registration renewal, along with a few other things here and there, and all of a sudden folks are looking at losing somewhere around $1500 a year of whatever disposable income we currently have left.
We can have honest debates over the merits of paid family leave programs, or providing free meals to school kids, or transitioning away from fossil fuels. But, in the context of our current economic capacity, there is no debating the reality that our tiny state cannot afford these programs as proposed.
Moreover, even if we could afford to raise this money, another largely ignored reality is that the workforce in Vermont doesn’t exist to operate the programs. Weatherize 90,000 homes and install 140,000 heat pumps under the Clean Heat Standard? We’re about 5000 trained workers short. Expand high quality childcare with teachers who have BAs or better? They aren’t here. Why is our workforce stagnant? The high cost of living caused by high regulation and high taxes like these are driving people to other states where their skills are just as much in demand, and they can keep way more of what they earn.
It’s this lack of critical thinking and rational planning that earned Vermont’s the infuriating rank of 44th worst in the country for tax dollars’ return on investment. Lots of bucks; little bang.
There’s one more tax increase we can expect. Our lawmakers are set to pass a bill to more than double their own compensation at an estimated additional annual cost to the taxpayers of $4,759,000. That’s $26,439 per legislator. They say they can’t afford to live in Vermont. How ironic.
Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. This article reprinted with permission from Behind the Lines: Rob Roper on Vermont Politics, robertroper.substack.com
Socialists love to spend other people’s money. I just hope that voters remember who put us in this predicament on election day. This is a case of taxation without representation. Don’t forget that we went to war with England over a tax on tea and taxation without representation. It’s time to rid this once great state of the liberals that have destroyed it. On another note, Francis Jones of Roxbury is a snitch and I hope that his drug dealing buddies do the right thing and take care of him.
Great job Rob.
Aren’t employers going to have to pay a .5% payroll tax as well for paid family leave as well? This cost will also pass to consumers.
At least about 68% of Vermont voters will be happy. They voted this arrogant, thoughtless super majority into office. They got what they voted for, so they should be jumping for joy. What’s it going to take to get voters of their butts and go vote these personal agenda driven activists out of office? The super majority doesn’t deserve the title State Representative. I have to question who are they representing?
The leftist commies did these unprecedented tax increase’s with no remorse for Taxpayers who have lost 7-10k of their personal income to the stupid free spending of the federal government run by their yokel buddy libs and progs. On top of that they have put us in the worst economic climate of 40 years with inflation at 7-14 percent and funding a illegal war as soon as we got out of Afghanistan. The war on energy has also added to the cost of living. Stupid VT voters had better wake up to being used as a piggy bank for leftist agenda before their piggy banks run dry.
Republicans will never get enough votes to cancel the programs put in place after 2019
All this unaffordable BS will be with us forever.
Centralized Command/control by rabid, extremist Dem/Progs will be with us forever
Town Clerks lost all local control over voter registration, which means Dem/Progs have total, A-to-Z control over elections
There is only one solution for individuals
Get out of Vermont, as people do in dysfunctional California and New York
Taxes are investment. If you want to not pay taxes, be prepared for a poorer quality of life. Try Mississippi. Even better, try Somalia.
Taxes need to be equitable. One would expect that someone earning 7,000 percent of the median income in Vermont would have a proportionally higher tax rate. What they actually have is a 3% higher tax rate. With the top 0.2% earning as much as the bottom 48% (17,537 households) in 2019, it is clear that equitability is a problem of the pitchforks and torches kind.
I paid a butt load of taxes to VT over decades, and it was not an “investment”…VT just blew the money. I remember when VT had a $2.5 billion annual budget…and lower taxes. This year maybe close to $8.5 billion budget (and $10 billion soon enough). I got educated, worked hard and took a lot of risks…put things on the line – but I believed in myself. It seems you don’t – So, you need a $ subsidy from other earners incomes, to make it “fair”?. I earned what I made. I am on this earth only once, and in my late years. I finally got “woke” and exited VT….happiest I’ve ever been. All my long time Liberal friends were, almost, to a person…sour, dour, bitter, angry… “class warfare & class envy”…they were, overall, not that happy. I laugh a lot, they don’t. It is like night and day leaving VT after many decades. Free Advice? It sounds to me like you are better off leaving VT as well…because the system you yearn for is the Communist/Socialist “Utopia”. So, I suggest you move to Cuba, Venezuela, Russia or China. But think TWICE, because people in those Socialist Utopia countries are desperate to get out…risk their lives to do it..and WHERE do they want to come? Take two guesses 🙂
Mr/Ms Gregory…it seems you are an “American leftist”. Fine. But realize what you do and think. This is from an Op-Ed a few days ago. “European leftists” are different…many are intellectual…Americans aren’t . I love the sentence where ” all American leftists have is slogans”…which is basically what you post here …slogans…and you get them all from…’Bernie Sander’s Hand Book of Angry Socialist Slogans”…:)
“““The American Left is fundamentally stupid….But even among the Left in general, American leftists have a thickheadedness all their own. European leftists have often been true intellectuals – people who do the reading, who are open to debate, who believe in ideas. But American lefties are simply punks. They think only in terms of slogans. They can’t reconcile experience and ideas. They can’t read or understand the historical record, or even grasp why it has any connection to the current situation…”
If they are an investment then I want a return on it as I have paid into it long enough. As it is, I get nothing for it. Now, if I was from a third world country on refugee status, I would get all the help I would need!
Years back when my wife and I were going through some tough times, I asked for just enough help to get through them. The state said and I quote, “Quit your jobs and we’ll give you all the help you need.”
Surrender my pride? No, Sir.
cgregory: Your claims on tax ‘equitability’ are incorrect – across the board. I suggest everyone read this March 26, 2021, testimony to the Senate Budget Committee Hearing on the Progressivity of the U.S. Tax Code.
https://taxfoundation.org/rich-pay-their-fair-share-of-taxes/
To start with, the Tax Foundation ignores the percentage of aggregate national income and mixes percentages and income in order to hide the appalling disparity.
Let’s look at the percentages of households at each income level and their percentage of the national income.
In 2019, 8% got 25% of the income, while 28% got 5% (hardly surprising that 50% wouldn’t have paid any federal tax, although they always get heavily dinged with other taxes and fees).
Having one group which is both one-third smaller yet 5,000 percent wealthier pay only 22% of total taxes is way out of whack. That group used to pay an affordable 91% rate on its marginal income.
The late Oklahoma senator Tom Colburn wrote the bible on tax loopholes. I suggest you read that rather than anything the Tax Foundation puts out.
I’ve read much of Coburn’s opinion on taxes over the years. Nothing I’ve read so far substantiates any of the claims you make above. And, as usual, you make no specific references to the contrary. So, show us.
Meanwhile, attacking the messenger – The Tax Foundation – without specifics is a cop-out.
For anyone interested in more specifics, here’s more data.
https://taxfoundation.org/publications/latest-federal-income-tax-data/
Considering he’s been dead since it was published years ago, you/ve done a lot of remarkable reading….
Coburn died only three years ago. And his opinions are well documented. But apparently, you’ve never read them. You should take your own advice. Much of what Coburn has said over the years is spot on.
Other than his excellent staff-written monograph on tax loopholes, Mr. Eshelman, I am not familiar with Coburn’s work. Could you supply me with a list? Thank you.
Of course, the best place to start is with Senator Coburn’s ‘Tax Decoder’. It gives the gist of an overly burdensome and loophole ridden tax code. Then we can discuss your orginal and misleading premise, that “If you want to not pay taxes, be prepared for a poorer quality of life.”
https://www.crfb.org/blogs/senator-coburn-publishes-tax-decoder
Other than that, try Googling [Senator Coburn on taxes]. There are more than 1.7 million references.
Too bad that Coburn died before being able to comment on my original post of the 8/25 and 28/5 split. I wonder what he might have said about it. As a Republican of course, he did not want to produce a “Tax Decoder” opus that would have reflected on percentages accruing to the various classes. I just ran across a piece the other day that claims the tax breaks for the top 50% exceed our military budget.
That argument is interesting for a couple of reasons.
First, the upper 50% starts around $70,000, which is piddling compared to the income that is the lower boundary for the 1%– $867,000 and change; but by scooping up as many households as possible, it makes it sound pretty daunting.
Second, however, is that a lot of those tax breaks are only for payments on mortgage interest, but the farther up the income ladder you go, as per “Tax Decoder,” the more arcane and high-income-focused breaks you find. One he didn’t mention was Senator Bob Dole’s “Gallo family Constitutional amendment” (his term), a bill he got through to benefit the Gallo family (donated $80,000, but of course no quid pro quo here) which exempted $100,000,000 of their estate from taxes.
Re: “tax breaks for the top 50% exceed our military budget.” So what? Where did you come across this assertion? BuzzFeed?
After all, even with their ‘tax breaks’, the top 50% pay more than 97% of total income tax revenues. The reason the ‘bottom’ 50% don’t get significant tax breaks is because they don’t pay enough income tax to qualify for a break by itemizing their deductions. And that’s because the Trump administration’s Tax Cuts and Jobs Act nearly doubled the standard deduction in 2018 (i.e., a tax break primarily for the ‘bottom’ 50% who don’t itemize).
Of course, what this has to do with your initial premise – “If you want to not pay taxes, be prepared for a poorer quality of life.” – is anyone’s guess.
Re: “Second, however, is that a lot of those tax breaks are only for payments on mortgage interest,…”
Yet another misleading statement. The Trump administration’s 2018 Tax Cuts and Jobs Act also lowered the mortgage interest deduction and eliminated deductions for casualty losses and miscellaneous expenses for the top 50% who itemize.
More than 100 million U.S. households, or 61% of all taxpayers, paid no federal income taxes in 2020, according to a report from the Tax Policy Center.
You’re doing a very nice job of distracting from the original argument about the disparity of income vs. taxation (with 28% of the population getting 5% of the income and 8% getting 25% of the income), which is a situation where households making 17,500% more per capita than the bottom 28% pay only 60% of the aggregate taxes.
And you’re doing a so so job explaining nothing relevant. People earn different amounts of money while they produce different levels of goods and services as they work. Some choose to not work. Some work hard and achieve little. Others work smart and achieve more. That’s life.
Accusing others of doing what you do is a common distraction. I’ve addressed virtually every point you’ve made. You, on the other hand, continue to ignore your original premise – that:
“If you want to not pay taxes, be prepared for a poorer quality of life.”
How so?
See below: “Taxes aren’t an investment?”
The fact that the wealthiest benefit tremendously from the present tax system is very relevant, especially when those on the bottom half of the scale are prevented from securing life, liberty and pursuit of happiness because of enforced poverty.
People don’t realize that the Bostonians’ revolt against taxes came about due to the monopoly and lobbying power the East India Company had on imports to the colonies. The GOP has been very successful in diverting people’s attention from that.
You continue to dance around your initial assertion. Why does not wanting to pay taxes result in a poorer quality of life?
Hmmm. Do they give any reasons why that’s the case? With 25% of the population earning only 8% of the gross national income, I can see one reason why a non-federal-income-taxpaying population would be sizable. I’m curious about the next 35%. Those at the top would certainly be enjoying some of the upper-class tax breaks (e.g. mortgage interest)). Let me know.
By the way, the Trump tax cuts that incurred a $3 trillion deficit to the budget started ending last year– BUT they are only ending for the bottom 75% of the population– people making less than $70,000. I hope you’re not in that group. How do you feel about a project that pushes ever more and more money upward?
Re: “Trump tax cuts that incurred a $3 trillion deficit”.
This is yet another false premise.
Federal tax revenues increased every year under Trump with the exception of a slight decline in the 2020 pandemic year.
The Federal deficit increased an average of only 4% per year under Trump (2017-2019), until the 2020 pandemic year when it ballooned to a 15% increase.
Under Biden, the deficit increased over 12% in 2021 and is estimated to have increased more than 15% in fiscal 2022 and 2023.
And you ignore the fact that it is excessive spending that incurs the deficit.
Spending under Trump increased from $3.18 Trillion in 2017, to $3.26 Trillion in 2018, to $3.54 Trillion in 2019. Spending ballooned to $5.6 Trillion in the 2020 pandemic year.
Under Biden, spending increased to $5.8 Trillion in 2021, and is estimated to be $4.76 Trillion in 2022 and $4.6 Trillion in 2023.
Not to mention the most insidious tax of all – inflation.
Inflation under Trump (2017 to 2020) averaged 2% per year. Under Biden, so far, inflation has averaged 6.75%.
Posted in the wrong place; re-posted here:
You’re doing a very nice job of distracting from the original argument about the disparity of income vs. taxation (with 28% of the population getting 5% of the income and 8% getting 25% of the income), which is a situation where households making 17,500% more per capita than the bottom 28% pay only 60% of the aggregate taxes.
Some went to the trouble and expense of educating themselves and getting appropriate work experience by the time they are 30 or 35.
They made an investment in themselves.
If you were one of THEM you would find it highly offensive the state confiscates a significant part of your wage income, and investment income, and spends it on government programs that the state thinks are good for the ruling party, aka revolting door
Taxes aren’t an investment?
Weill, I got up this morning and turned on the light, which was affordable because my taxes paid for a government regulator who makes sure the power company (a monopoly) doesn’t overcharge me.
Then I had breakfast eating foods that were provided throughout New England thanks to a network of air, rail, canal and highway systems my taxes paid for and maintain. It also pays for health inspectors to ensure I am not sold spoiled or poisonous food.
It was raining heavily, but I didn’t have to worry about the threat of a flood, thanks to the taxpayer-funded and -maintained flood control dam four miles upstream, doing its job since 1958.
And my taxes that paid for that dam (barely pennies per month!) was saving me the $600 a month flood insurance that relatives of mine have to pay in Connecticut.
The kids I saw going to school were receiving educations in a state that ranked 4th in the nation for educational excellence, thanks to the property taxes every Vermonter pays. I was pleased to know that, thanks to the social mobility my taxes provided them, at least half of them would leave town after graduation, to learn about the bigger world in college, the military or fantastic jobs, contributing in their turn to our country’s greatness.
My vehicle was not damaged during my travel, thanks to taxes keeping the streets and the stoplights (costing taxpayers here $600 a month) in good repair.
I didn’t worry about someone breaking into my house while I was gone, because my taxes pay for the cops my neighbors would call, and if it caught fire, the fire department— paid by my taxes— would be there in a jiffy.
The company I worked for is doing well partly because my taxes covered the tax stimulus it received during the covid pandemic, and I make pretty good pay because other taxpayers provided the loans and grants I needed in order to get more training and a better job.
So, life is good for me and most people thanks to taxes, because they are an investment in making life better.
Your taxes didn’t cover squat. About 20% of vermonters pay 65% of all taxes taxes already. There’s only so much more that VT can take from them, before they say “enough” and leave. WHO will subsidize you then? second, VT got te LARGEST AMOUNT of free gov’t covid money, per capita, than any other state. And VT blows it all on woke. Third, VT has ALWAYS gotten billions of “free” money from the gov;’t and unlikely largess to continue like that. and it ranks as FAR more $ than VT sends to the Feds, in income taxes. VT LIVES on gov;’t money, not what you pay. 70% of vermonters have to get their property taxes SUBSIDIZED because TAXES are too high. VT owes about $4.5 to $5.5 billion in UNFUNDED Union liabilty. WHO can pay that? YOU? Nope. VT wants free of subsidized healthcare for all, they say it is a “right”. Flip side is I know two doctors who left VT. There is large a doctor shortage already. One told me he was HORRIFIED at the schools VT and what they taught his kids, brainwashing Both docs told me TAXES were far too high and their SALARY was much lower than they could get in other states. THEY LEFT. And hospitals in VT have tons of unfilled Dr. jobs. No one is coming. Look at CVH or UVM hospital website for job openings. HUNDREDS unfilled! Doctors make high salary relatively. YOU TAX THEM more and you will have fewer doctors in VT to provide “free” or subsidized healthcare. What will Libs do then? Oh, yeah…blame Trump 🙂
They spend like drunken sailors, never ends, Federal money will not be as generous going forward…yet, huge spending increases on Eco-Enviro-Climate-BLM-CRT-DEI-EV’s-Gender-Trannies- Race-Sex-UNIONS etc…for little or no payback. VT CANNOT CHANGE the earth’s climate. Mother Nature does it for you..
The end is near, I’d say in four years or less. Reaity is the last at bat….VT will be a $9 to $10 spending budget in a few years. By then, only way out for dopey Progressives is to tax the 20% of higher income Vermonters even more. They already over tax them for property and income taxes (20% of VT population pays appox 65% of all taxes). So NEXT? Only way out is to propose a WEALTH TAX, like Calif is trying to do. At that point a wealth tax is basically full boat communism….they just take a small percent annually of your assets of home value, bank accts, investments… Get out now….”VTGON”. Numbers don’t lie, Liberals do 🙂
” Why is our workforce stagnant? The high cost of living caused by high regulation and high taxes like these are driving people to other states where their skills are just as much in demand, and they can keep way more of what they earn.”
That may be part of the problem. The real issue is welfare is competing for every job that pays less than $30 per hour and welfare is winning
That’s on top of the approximate 6 billion in unfunded liabilities in this state! It seems we have financial morons that are completely clueless as to how to budget anything!!!
Ya think ?
You got what you did not vote for!!