(Excellent analysis – promoted by JulieWaters)
The Sec. of Administration sent a letter to the Joint Fiscal Committee yesterday regarding proposed reductions in the state budget. It said that “Raising taxes is not an option…To swamp Vermonters with more taxes when they are getting crushed with higher fuel costs is too much for the average Vermonter, especially when we are still one of the higher taxed states in the nation.”
This is an outrageous distortion of the facts and is a reminder that this Governor is an adherent of the Grover Norquist school of governing.
First, Vermont is only one of the higher taxed states if you measure taxes paid per capita or as a percentage of total income. But this ignores the distribution of the the “burden”. Volume 2 of JFO’s Tax Study showed conclusively that Vermont’s tax system is one of the fairest in the country and that average Vermonters pay much less than people in most other states. Look it up. [Note: And don’t buy that crap about how the report didn’t include education property taxes. The income sensitivity provisions of the statewide property tax would make us look even better.]
Second, To my knowledge, no one has suggested raising taxes on average Vermonters. But why shouldn’t the legislature look to those who can afford to pay a little more? For example, the income of the top 0.2% of filers (492 families) increased by $338 million from 2005 to 2006. Is the Governor really arguing that these folks would be disadvantaged if they were asked to help avoid cuts in public services? This group earned $1.4 billion in 2006 and paid $79 million in income taxes (an effective rate of 5.7%). If they paid 10% more, we could raise almost $8 million (a third of the $24 million General Fund gap). This would represent less than 0.6% of their total income, which averages $2.8 million. I don’t think it would change their vacation plans.
Third, it is disturbing that the Douglas administration wants State workers and those who rely on government services to shoulder all the burden of these budget adjustments. The Governor’s proposal asks NOTHING of the wealthy in this difficult time. Even Gov. Snelling understood that sacrifice should be shared. Whatever happened to Vermont values?
Fourth, in my opinion, it is immoral to propose cuts to human services programs before reducing the number of PR flacks that work for the Governor.
Fifth, in light of the Auditor’s recent findings, it is troubling that off-budget tax expenditures like VEPC tax “incentives” were not targeted for reductions. The Auditor found that many of the jobs supposedly created by this program would have been created anyway. That means that some of the money was completely wasted. Why wasn’t the VEGI program’s annual $10 million cap reduced?
We can only hope that the legislature will demonstrate more leadership and compassion than the Governor. Protecting the wealthy as average Vermonters suffer is not what I expect from our elected officials during tough times.