Wednesday night was a crazy mix of dive bars and Gubernatorial candidates. I walked around the corner to bohemian coffee shop/restaurant Radio Bean to see my Argentinian friend Lucas on his last night in here Burlington. Noticing Peter Shumlin, Democratic candidate for Governor, across the bar, I realized this was the perfect opportunity to ask him a question his campaign staff had been unable to answer for me. Shumlin was on the move though, so I followed him to the OP, the dive bar next door. After letting my anthropological imagination devour the sight of a Gubernatorial candidate work the hipster, American Apparel clad, dive bar set for a bit, I dove in, asking his position on raising revenue via the Snelling Surcharge (a means of raising revenue by temporarily raising taxes on Vermont’s tip-top income earners to prevent the laying off of teachers, state workers, mental health employees and many other vital social services that keep our state running. Conservative deficit hawks like Republican Jim Douglas and Brian Dubie are quick to cut these middle class jobs in financial downturns, so as to preserve low tax rates for the ultra-rich).
Shumlin said that “we can’t squeeze VT’s most affluent much more,” that taxes on them have already “been raised from 6% to 10%.” I recounted to him how taxes on VT millionaires have been slashed from paying $150,000 on $1 million dollars in earned income in 1968 to under $60,000 on $1 million in 2010. Shumlin maintained those were federal taxes and re-iterated his original claim that the most affluent in Vermont can’t pay any more. Clearly at an impasse, we segued in a discussion lameness of DC Dems. Ironically, he mentioned how Dems on the Federal level need to tax the wealthy instead of just sitting their with their “[slang for male genitalia which I see no reason to repeat here] in their hand.” At about this point I realized close talkers, like Shumlin, make me really uncomfortable, especially when employing locker room vernacular. After he asked me what I do. I told him that for the past 8 years I worked in Mental Health, and that there was an awful “brain drain” effect due to stagnant wages and budget cuts, and that the suffering of our most vulnerable is going to increase until we raise revenue. He tried to find common ground around revenue shortfalls, talking about his own dyslexia, kids with learning disorders being disproportionately locked up and how he would free up some $60 million annually for mental health and other social services vis a vis releasing non-violent offender and de-criminalizing marijuana. Some ten minutes later it was all over, a very weird window into the final days of this seemingly endless Democratic primary.
I looked into tax rates to fact check Shumlin’s numbers. Here’s what I found:
* The top marginal tax rate was reduced when state lawmarkers got rid of (most of) the 40% capital gains exclusion; overall, this change will result in some very high income Vermonters paying more but nothing like the 1960’s.
* He was mistaken about the federal vs. state issue (those reductions resulted from changes in federal & state taxes but the result was a huge decline in state tax liability).
* The key is how much they pay as a percentage of income (this is referred to as the effective rate); on average at present, the wealthy pay 5.3% for Vermont state income taxes; to say there is no more capacity is far from a fact, it’s an opinion. Shumlin was probably referencing the top marginal rate. One of my criticisms, among many, of the way Douglas talks about taxes is his constant flood of soundbites regarding Vermont’s 9 or 9.5 percent top marginal tax rate. Because it only applies to taxable income over about $347,000, many high income Vermonters pay less in income taxes here than they would in other states that have lower top rates that kick much sooner than Vermont’s. To see a Democrat seemingly taking a page out of Douglas’ middle class eroding playbook is disappointing to say the least.
All that said, as friendly and giving of his time Shumlin was I’m really troubled that he wouldn’t make the most affluent in our society share the burden equally in this worst economic crisis since 1929. What’s almost as troubling is the degree to which Shumlin misrepresented the taxes paid by Vermont’s most wealthy in order to close the door on a share-the-burden-fairly initiative like the Snelling Surcharge.
Perhaps not coincidentally Peter Shumlin would be directly be affected by the Snelling Surcharge, his federal tax return shows he and his wife had an adjusted gross income of an eye-popping $947,732 in 2009 (Burlington Free Press, 4/20/2010). The Shumlins’ annual haul is just a little less than 5 times the amount Google Exec, and fellow Gubernatorial candidate, Matt Dunne makes. According to the same article, the other candidates salaries range from $95,969-$198,435. Not to put too fine a point on Shumlin’s own vested self-interest in this, but he loaned his own gubernatorial campaign $225,000, or more money than any of the other candidates make in a single year. None of the educators or state employees I know, who have lost their jobs due to revenue shortfalls, can loan themselves a quarter of a million dollars to help themselves attain a new job. But then again, those individuals, and their corresponding professional organizations don’t support Shumlin’s candidacy. Instead they choose to support the one candidate from either party who has gone on record saying he would raise revenue to preserve vital social services, Doug Racine.
I’ve been torn between voting for Shumlin and Racine for months now. They both share many of the strengths I’m looking for in moving Vermont forward after eight years of Jim Douglas. Both would close Vermont Yankee and enact single payer health care. After going to debates, scrutinizing their campaigns in the media, I never thought my decision would be made amongst the buzzing neon, pint glasses and popcorn of my neighborhood dive bar. This beer soaked tableau almost certainly wasn’t the setting Supreme Court Justice Louis Brandeis was thinking of when he made the famous quip that States were “the laboratories of Democracy.” Then again, here in in this small state of 621,760, the first one to outlaw slavery, and the first to sign civil unions into law, perhaps it isn’t entirely surprising after eight long years of Jim Douglas’s slash and burn economic agenda, people are ready to push politicians for economic justice from dive bar to Statehouse and back again, and I’ll gladly raise a toast to that.
… and that side is the slash and burn side.
Doug is a very nice guy. I first met him in ’93 or ’94, and he’s still the same.
The problem is that the left is not reducing the debate to a morality play, where the basic values are repeated endlessly, and the heroes are good, and the villains are bad.
The right has no problem doing that, and their effort is winning out. It will continue to win until there is some real opposition.
Jonny, it’s good to hear you’re finally onboard with Racine.
Thanks for sharing this story. We need to consider and discuss raising revenue from those who can afford it. It’s just the moral thing to do. Doug Racine understands this.
it’s quite disappointing that with all their great strengths the other candidates don’t seem willing to even entertain this particular idea.
I certainly agree that the wealthy can be taxed more, and I have always admired former Governor Snelling’s decision to raise tax rates on Vermont’s top income earners in order to deal with a budget shortfall.
However, there is one really important difference that you are missing here. Racine and Shumlin are NOT both for single payer health care!! Racine has never endorsed single payer. To the contrary, he has said over and over again that it is only one possiblity he will consider and he has not commmitted to it as the only solution. You will not find one piece of campaign literature or one news story where Doug Racine commits to single payer. That is a really important fact you should consider. Indeed, I would be shocked if Racine were to push for single payer were he to become governor, because there is nothing in his public record to indicate he is for it. He never even co-sponsored S.88 when it was a single on payer bill.
So, even if Racine were to raise taxes (something he has waffled on in debates the last few weeks anyway), you need to consider that he would be expending the extra revenue in a dysfunctional system. The system must be reformed and that is why single payer should be the number one issue if you are interested in how to take care of human needs and the state budget. You should consider that health care related spending is about 50% of the human services budget and about 25% of the state budget overall. Without single payer, we will never get our hands around the cost issue.
You should also consider that whoever enacts single payer will be replacing a premium with a tax. If we are going to work for single payer, then I think we have to recognize that some people will perceive it as a new “tax” even if it is just replacing premiums. So, although I would normally agree with the Snelling approach, I don’t think you can do that in the same calendar year or legislative session in which you are trying to pass a single payer plan. It just won’t work politically, and could work against getting single payer passed through the legislature. Given that single payer will save hundreds of millions of dollars and create universal access to health care, my choice would be to go with single payer as the number one priority, and that tips the hat to Peter Shumlin.
I agree that those with more should pay more and the burden should not fall disproportionately on those with less as it does now. I also think, however, that single payer as an issue trumps tax policy in this election, because the savings are momentous and it is so much more than simply plugging the leaky budget. It is getting a new bucket. If we don’t enact single payer, with or without new taxes, the costs of our health care system will spiral out of control and this will drastically effect human services in our state, which is something you do care about and which we should all care about.
Racine says at the 3:20 mark of the final video clip in the following link. “our goal: universal coverage for all Vermonters at an affordable cost.” http://vtdigger.org/2010/01/07… I’ll leave the debate of whether or not that is Single Payer to others. Single payer is a financing mechanism. Myself and many of the thousands of other Vermonters who have been organizing around health care want a comprehensive health care system that works for everybody that meets human rights principles. I agree with much of what Sue and bostaurus said regarding ego/consensus building and Shumlin/Racine. Anyone besides Sue and Ivan have any thoughts on the thrust of the article, raising revenue?