2017-07-13 / Letters

State Tax Reform


GOVERNOR SCOTT has told agency heads
to propose budgets that include spending
cuts of 2% to 4%. Sound familiar? It
should. We've been down this road before and we
are bound to end up in the same place, yet again.
Focusing only on budget cuts is a mistake. We
can look for efficiencies but there are some basic
problems with the cuts only approach; our state
budget already underfunds needed services and
the tax system that raises the money that funds
the budget is unfair. Like it or not, we need more
investment in everything from social workers and
early education to clean water and infrastructure.
Otherwise our problems will only get worse. Budget
cuts clearly don't help. And, our current tax system
puts too much pressure on middle income families.
So, instead of yet another round of budget cuts
we should put down the scissors, make our tax
system more fair, and deliver tax relief to middle
class families.
Middle and lower income people already pay a
larger share of their income to fund state government
than wealthier folks do. They pay about 10%
of their income in state and local taxes while the
wealthiest contribute 7.7%. (Public Assets
Institute/Institute on Taxation and Economic
Policy). For school funding they pay about 3% of
their income while those with higher incomes pay
less (Vt. Dept. Taxes).
To add to the inequity, between 2008 and 2014
the wealthiest Vermonters saw their incomes double
while those earning under $100,000 saw minimal
gains or actual drops in income (Vt. Dept.
So, the same people who struggle hardest to pay
for childcare and college and to pay the rent or
afford a home, the same people with stagnant or
declining incomes, make the biggest sacrifice when
it comes to paying taxes.
No wonder they are fed up with politics as usual.
It's not fair. And, it's the part of the so called affordability
problem the Governor and others choose to
You may or may not like paying taxes, but let's
agree they should be fair.
Fortunately, we can make taxes more fair while
also generating more revenue. But, it means those
who have been benefiting from the current unfair,
system will pay their fair share. It's not about new
broad based taxes or about soaking the rich. It's
about restoring fairness. And, standing up for hard
pressed middle and lower income families. The
same folks, by the way, who will bear the brunt of
budget cuts.
Senator Chris Pearson and I have introduced a
plan to make education funding more fair by moving
school funding more towards income, extending
the income sensitivity policy that most
Vermonters already use to pay school taxes. Higher
income Vermonters would pay based on the greater
of their income or property values. According to the
Joint Fiscal Office, it would generate $80 million in
new revenue to invest in education or reduce property
taxes for middle and lower income families.
We could also eliminate tax deductions that favor
the wealthy. We are one of only seven states that
allow the widest range of tax deductions and
exemptions by basing state income taxes on federal
taxable income. By changing to adjusted gross
income we could lower rates for everyone and
recapture tens of millions of dollars in deductions
that now generally benefit wealthy taxpayers.
Tax reforms like this deserve serious consideration,
more than yet another round of budget cuts.
But, they are largely ignored. Instead we keep chipping
away at the budget, cutting important services
and environmental protections, protecting the
wealthy and making life harder for already hard
pressed, middle class Vermonters. It's not working.
And, it's not fair.
It's time to change course and give the middle
class a break.
Vermont Senate
Washington County

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