By Rob Roper
The Wall Street Journal ran a story about New York’s $2 billion plus budget shortfall. New York’s Governor Cuomo blamed the predicament on, “wealthy individuals living in these areas were either moving or shifting their official residence to lower-tax states, causing the shortfall.” This actually presents an opportunity for Vermont, but it would require our legislators to reshape our state as an attractive tax landscape for these individuals rather than an out-of-the-frying-pan-into-the-fire option.
Vermont, with our natural beauty and stellar quality of life should be an attractive landing spot for mobile, high income retirees. It isn’t to the extent it could be because of the following:
- 37 states do not tax social security benefits. Vermont does. (Source)
- 33 states have no estate or inheritance tax. Vermont does. (Source)
- 9 states have no income tax (like our neighbor to the east). Vermont does. (Source)
- 44 states have a lower marginal maximum income tax rate than VT (Source)
- Only 8 states have higher property tax rates than VT (Source)
So, if you’re looking for a place to move and live on a fixed income, while at the stage of planning to pass your assets on to your children, what incentive does Vermont offer? If we don’t change our tax policies we will not only find that we can’t attract high asset retirees, but we will neither be able to retain our own. And, like New York, we will find ourselves wondering where our revenue has gone.