Progressives have pushed for a greater investment in childcare, higher education, student loan forgiveness, weatherization and clean energy for years, so it was encouraging to hear Governor Shumlin promote these initiatives in his state budget.
While we applaud his priorities, many of us across the state find his funding proposals detached from the economic reality of our neighbors. They are an insult to the working families of our state.
Take a look at this snapshot provided by Thom Kavet in his annual revenue summary prepared for JFO, which shows the change in income by income class for Vermonters over the past 10 years.
The median household income in Vermont is $53,000. That is, half of Vermont households are on the top half of this chart and half are on the bottom. Given that, I think most reasonable people would look at this and conclude that any new sources of revenue have to come from the top half.
Gov. Shumlin seems to think it’s those living in the bottom half who should pay up.
Today, we present nine revenue options that draw from those on the top half of this chart. We present a package totaling $50 million and hope it will stimulate discussion and inspire legislative leaders to find ways to advance Shumlin’s priorities without hurting those who can least afford it.
Progressive Revenue Menu
1. Bank Franchise Tax (pay higher of BFT or corporate income) $5.0 million
currently 0.000096 of the average monthly deposit
banks have expanded into services, etc
2. Tax capital gains as ordinary income $11.0 million
currently exempt first $5,000
3. Property Transfer Tax per 0.25% value > $500K $1.5 million
adds 3rd tier for high-value properties
4. Estate Tax – reduce exemption from $2.75 to $1 million $1.9 million
brings into line with neighboring states
5. Income Tax Top Bracket Collapse $20.0 million
brings actual rates closer to marginal rates
6. Vermont Alternative Minimum Tax $1.0 million
parallel’s federal structure
7. Escheat (unclaimed bottle deposits) $1-2 million
reclaim the nickels
8. Natural Resources Extraction Taxes
Groundwater extraction 28 cents per gallon $4.5 million
Earth Resources extraction 2 cents per cubic yard
We are one of only 11 states without one
9. Eliminate Sales Tax Exemptions
Bottled Water $1.0 million
Clothing > $100 $2.2 million
We don’t need bottled water
People buying $120 sweater can afford $7.20