Vermont House committee reviewing tax relief bill

By Dave Fidlin | The Center Square

Vermont residents could experience tax relief in a number of specific circumstances if all of the components of a recently introduced bill come to fruition.

state of Vermont

State Rep. William Canfield, R-Fair Haven

State Rep. William Canfield, R-Fair Haven, is the sponsor of H.527, legislation that could result in changes to Vermont tax policy with credits for things such as child care and dependents, student loans and workers in industries with labor shortages.

The bill was introduced in the House this month and subsequently referred to the Ways and Means Committee, where various passages are going under the microscope.

At the committee’s most recent meeting, legislative members and state staffers combed through six components of the 44-page bill.

One substantive portion of the legislation could repeal a so-called alternative minimum tax for some of the state’s highest income earners.

“It used to be more of an effective tool in ensuring folks who had a lot of subtractions from their income were still paying a minimum level of tax in Vermont,” Rebecca Sameroff, deputy commissioner with the state Department of Taxes, said of the original intent behind the alternative minimum tax.

Sameroff said there have been a number of ancillary issues that have impacted the alternative minimum tax over time, including capital gains taxes and residents who are able to make sizable medical deductions.

“These are people who are in a very specific mathematical situation,” Sameroff said.

State Rep. Carol Ode, D-Burlington, who serves on the Ways and Means Committee, said she wanted to hear more testimony on the alternative minimum tax and how changes to it could impact the state on a broader level.

“Another way to look at it is people with that kind of high income are choosing Vermont to live in, and that generates jobs and income taxes,” Ode said.

State Rep. Janet Ancel, who chairs the Ways and Means Committee, said she, too, would be interested in a deeper look into the alternative minimum tax.

“I would find it helpful to see a little more historical data on this,” Ancel said. “This is a good discussion. But I will admit I’m not convinced yet.”

Because of the way it is tailored, Sameroff said the alternative minimum tax has a number of intricacies. From her professional vantage point, she also questioned its efficacy.

“This is a very complex, complicated policy mechanism,” Sameroff said. “I wonder if it’s worth the squeeze.”

Images courtesy of Flickr/401kcalculator.org and state of Vermont
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One thought on “Vermont House committee reviewing tax relief bill

  1. The VT AMT was put in place to limit legal itemized deductions by high-income taxpayers. Well, in 2018 as a kneejerk reaction to the federal tax reform bill of 2017, VT axed ALL itemized deductions which immediately negated the impact of the AMT…..except they forgot to repeal it at that time.

    One of the rotten aspects of this elimination of deductions in 2018 was that taxpayers with very high medical bills (such as people with chronic medical conditions and residents of nursing homes) were suddenly hit with MUCH HIGHER VT income tax bills as a result of this change. This impact of the change was ignored by the House committee in their constant effort to stick it to the “wealthy”.

    In 2019, several taxpayers including one of my colleagues in the tax preparation industry testified before the HWM committee about this impact and the legislature recognized the problem. So they reinstituted the medical deduction….. ummm ….. well sort of …. they again forgot to repeal the AMT !
    So the impact to the affected taxpayers was muted because the old AMT law was still severely trimming the reinstated deduction.

    This is a 5 second decision. They blew it. Now they have to discuss the revenue impact of eliminating the AMT while it is hurting the very folks that the committee members profess to care about ? What a waste.

    WALE UP FOLKS ! The legislature has a huge pot of money to dole out to their preferred constituents at the expense of others. H.527 is a grab bag of goodies for their selected beneficiaries. They are continuing to pick winners and losers. They already penalized the self-employed and lifetime savers a decade ago and then they penalized the sick and aged. Now they want to give more tax-free welfare to families earning a half a million dollars. This is what chairwoman Ancel and Vice Chair Kornheiser want to do in the name of tax relief. How can you have relief it 61% of taxpayers actually do not pay any net income tax ? Many of you can expect similar unfavorable treatment in the future. You should bitch like hell.

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