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 and Means Committee is contemplating raising $167 million 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, and 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 and Means Committee’s May 7 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. Some $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.