John Klar: Unlike tiramisu, layered taxation is not sweet

By John Klar

In the classic Italian dessert, tiramisu is comprised of rich layers of ladyfingers, espresso and mascarpone blended with eggs and sugar. In the modern government concoction of tax tiramisu, the layers of siphoned taxpayer funds do not appear distasteful until the whole stack is examined.

Consider a single Vermont resident earning the Vermont median income of $57,513 annually. The federal taxes will be about $8,511, or a blended rate of 14.8%; Vermont state taxes will be  $2,009.66, or 3.5%. Often left unmentioned is Social Security and HI taxes, reflected on pay stubs as “FICA” (Federal Insurance Contributions Act), which totals 7.65% of gross wage income (matched by the employer, or doubled if self-employed).

John Klar

But there are other layers of tax yet to be savored in this unsavory cake. Vermont ranks third in the nation for property taxes as a percentage of income, with a median real estate tax of $3,444.00, or 6% of that median Vermont income of $57,513. A cold climate ensures that Vermonters incur high heating bills, on which the government recently doubled the tax. Long commutes are bad enough, but gasoline is subject to fuel taxes (currently 31.19 cents per gallon in Vermont; 18.4 cents federal). There are a host of state taxes, including the sales tax and the meals tax. If our hypothetical Vermont taxpayer paid the state average of $603 annually in sales tax, another 1% of annual gross income is expended.

Our fictional taxpayer’s gross income has now suffered nearly 35% government absorption in this exposition, yet we are not through the layers. That food and clothing that is supposedly free of taxes (because exempt from sales taxes) actually includes many more layers of tax. The Vermont purchaser of a package of broccoli from California pays the farmer, the distributor, the trucking company, the grocery store and all the layers of corporate or business tax inherent in their receipts. What’s more, the “consumer” pays for the profits and taxes (income and sales) for the other incorporated layers of labor and materials in those enterprises: the equipment manufacturers, fuel, fertilizers, buildings, real estate taxes, and wages of all those links in that layered chain. If the consumer buys a can of tunafish, the chain includes the fishing industry, refrigeration systems, canning and tin mines — all along the chain, the layers of tax are folded delicately into that thing called price.

A similar layer of taxes infuses televisions, video games, electricity grids, and automobiles. None of those industries or the hierarchy of industries and workers that supply and support them would function if not for profit, and profit attracts tax, and consumers pay both the profits and the taxes.

Examined from my grandparents’ perspective, consider that in 1930, in Brookfield, Vermont, they had no electricity, and the family heated with firewood. They had no phone bill, no computer bill, no oil or electric bill. Property taxes were extremely low, and they had no mortgage. Yes, they were poor, but they always ate. Today, most people need to earn $2,000 per month to cover utilities and housing before they go to the grocery store or pay for health insurance. We moderns may have more conveniences, but we have little economic liberty. 

 But the biggest problem facing modern Americans — and especially Vermonters — is that government only grows larger. It does not matter how well-intentioned government expansion may be — if it creeps steadily larger, government growth becomes a drain rather than a servant.  Vermont’s government bureaucracy has grown so large relative to the earnings, size, and demographics of the state’s population that it is like a dragon eating its own tail. Salaries have risen steadily, benefits and pensions have been liberally promised (though much under-funded), and new taxes and regulations are unveiled annually. But all of this is accomplished with complete disregard for the ability of the Vermont economy to earn the tax revenue to pay the tab.

The Vermont tiramisu is stacked too high, layered with decades of government gluttony and legislative disconnect. Vermonters can no longer afford this government extravagance at taxpayer expense. But we have been force-fed like market geese; our throats are choked. As 2020 and a likely national economic downturn (we are overdue) approach, the situation for Vermonters becomes more dire as many flee the state — leaving ever-shrinking (and aging) numbers to carry an ever-expanding burden. This further threatens the state’s future credit rating.

The bloated Golden Dome in Montpelier can no longer simply say “Let them eat cake!” and pile on more layers for taxes (carbon, cannabis, etc.), more regulations for employers and businesses (minimum wage, family leave, etc.) — always with more jobs for bureaucrats for “administration and enforcement”.  

It is time for Vermonters to trim the excesses of Vermont government expansion before the only ones who can afford to reside here are those in government employment. It is true that “a man does not live by bread alone,” but it would be nice to have a piece of the stuff left in Vermonters’ mouths after all the sugary legislative promises prove rancid. Vermont has had so much legislative tiramisu that the entire electorate is on the verge of a collective expectoration.

John Klar is an attorney and farmer residing in Brookfield, and former pastor of the First Congregational Church of Westfield. He is running for governor in 2020.

Image courtesy of Wikimedia Commons/Raffaele Diomede

9 thoughts on “John Klar: Unlike tiramisu, layered taxation is not sweet

  1. The Federal government asked the question last month: “What is the average American’s largest expense: food, housing, health care insurance or healthcare itself?” According to the Dept of Labor Statistics, the single largest expense is taxes. When this one expense grows faster than the minimum wage, faster than the cost of government mandates and regulations, the legislators responsible lament that the current minimum wage must again be raised to a “living wage.” Clearly it became “un-livable” because they never met a tax they did not like. 70% of Americans do not have $1000 saved for emergencies. 40% have -0- saved. Rather than to cut back on taxing and growing their bloated beaurocracy, they blame business for the problem and dictate they pay more for the mess they have created.

  2. Vermont’s Layered Taxation = Liberal Transplants in the Statehouse !!

    Montpeliers answer to everything is to throw a new tax at it, you cannot tax your way
    out of foolishness ” stupid is as stupid does ”

    Vermont’s Unfunded Liabilities, you cannot tax your way out of that Montpelier ??

    Wake up people, vote these fools out, just look at the 2020 legislative agenda and
    you’ll understand !!


  3. Regarding this article, I have often thought about summarizing all the taxesto produce a product from the raw material to the shopping bag. AND the farmer that had to buy the land, equipment, seed, harvesting, trucking, to the processing plant to truck or train the product to market and then the distribution network (with all the fingers involved) to the stores. What does it take to raise meat to the shopper?

    The lazy bureaucrat sits there with their hand out collecting all and everywhere. I haven’t mentioned what it takes for a person that “owns(?)” property.The Feds, State, County, Town/city all collect to keep their machine greased and running. Can’t afford to pay, they’ll ruin you. Parasites.
    Ya I hate them.

    • And in retail or restaurants they take 9-10%!!!!!

      Even when you lose money on a meal, or have to sell something at a loss the state earns 10%.

      That’s a pretty good deal huh? All those restaurants that put their life savings into,heart, sweat and probably tears to lose money, not the state, they made 10%.

      Even the mob knows a business has to function in order for it to pay for protection. Not the socialist! Of course a socialist wants to control everything and eventually, sooner than later ruins everything.

  4. If John thinks the folks earning $57,000 get heavily taxed, he should check out those in the higher brackets. As a matter of fact, he better check quickly because they are leaving in droves.

    • It’s reported (many sources) families are moving into Alabama at the rate of 9 families every hour.AL is a big state. My trip from the
      GA/A L line south to Gulf Shores (near Pensacola) is a solid 400 miles. Believe AL is the second largest state (GA first) east of the MS River. TN is over 420 miles long, but narrow. The south is booming and nice, currently here.

      A day will come shortly when VT is in my rear view mirror.

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