By Sarah Mearhoff/VTDigger
It is high time, a coalition of state political interest groups said Thursday, that Vermont’s wealthiest residents pay their “fair share” in income taxes.
Members of the newly formed coalition, which is dubbing itself Fund Vermont’s Future, gathered in front of the Vermont House chamber Thursday morning to call on legislators to raise state income taxes on Vermont households that earn more than $500,000 annually.
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Such Vermonters make up roughly 2% of the state’s population, Fund Vermont’s Future campaign manager Anika Heilweil said Thursday. A 3% surcharge on income over $500,000 could bring in nearly $100 million in additional revenues to the state, according to an analysis by the Public Assets Institute, a Montpelier-based think tank.
“We all see the effects of increased income inequality, as wages for the vast majority of Vermonters are not keeping up with rising costs of living,” Heilweil said Thursday. “We see the effects of insufficient revenue being raised to provide basic services, and we see the inevitable costs of these goods and services — public goods that the government should be providing — being passed on to low- and middle-income taxpayers who can least afford them, while our current tax structure protects the wealth of a small number of residents.”
The newly formed coalition includes seven interest groups: the Public Assets Institute, American Civil Liberties Union of Vermont, Vermont Conservation Voters, Vermont Early Childhood Advocacy Alliance, Vermont Natural Resources Council, Vermont-National Education Association and Voices for Vermont’s Children.
Nationally, politicians and the public in recent years have paid increasing attention to the widening economic gap between America’s wealthiest residents and its working and middle classes. U.S. Sen. Bernie Sanders, I-Vt., has taken to many a campaign podium to decry income inequality and call on the federal government to force the country’s “one percent” to pay their “fair share.”
Now, the conversation over fair taxation has moved from the national stage to statehouses. Proponents of the Fair Share for Vermont proposal on Thursday pointed to Massachusetts’ new Millionaires Tax, a 4% tax surcharge on income exceeding $1 million, as an example.
In Vermont’s left-leaning legislature, at least one chamber seems eager to take on the topic this coming legislative session. Rep. Emilie Kornheiser, D-Brattleboro, who chairs the House’s tax-writing Ways & Means Committee, told VTDigger that on her committee’s to-do list is to “get our heads fully around taxing wealth, and what that means, and what the definition of income is.”
She harkened back to former-U.S. Supreme Court Justice Louis Brandeis’s sentiment that states are “laboratories of democracy” and said it’s up to state governments to test new policy ideas when the federal government won’t act.
“What we’ve seen in so many policy areas — from abortion rights, to medical care, to family medical leave … to environmental protection — is that, given the state of our national politics, it really is up to states to be moving these things along,” Kornheiser said.
Whether a bill instituting a new wealth tax becomes law next year is another story. Kornheiser noted on Thursday that there is not yet a bill to discuss, with 2024’s legislative session still months away. And even with the House’s blessing, any such bill would have to contend with the Vermont Senate and Republican Gov. Phil Scott.
Sen. Ann Cummings, D-Washington, who chairs the Senate Finance Committee, told VTDigger on Thursday that she is open to debating the concept in committee should a bill reach her desk. But as for what constitutes wealthy earners’ “fair share,” Cummings warned, “fair is in the eye of the beholder.”
“I’m sure that the people being taxed might have a different definition of that,” Cummings said. “But we’re all also aware that income inequality has gotten much larger, that blue-collar workers are losing ground.”
“If this is a way to transfer some of that wealth, I don’t know,” Cummings added. “It would be a way to pay for services.”
Asked about the concept at his weekly press conference in Berlin on Wednesday, Scott answered, “We have a pretty progressive tax policy here in the state already.” He questioned how much more Vermont could squeeze from affluent residents before they simply decide to leave the state.
Kornheiser was skeptical of the governor’s theory that a tax bump could provoke an exodus of Vermont’s wealthiest. Wealthy people are actually moving to Vermont, she argued, and the reason that anyone stays in the state is not because of tax rates.
“I think people move to Vermont and stay in Vermont because of natural resources that we care for, because of infrastructure that works and, most of all, because of the quality of life and all of us caring for each other and caring for our neighbor,” Kornheiser said. “That requires resources and it requires resources that all of us are pitching in, especially those who are most able to.”
