There were basically two parts to the Governor’s weekly presser Wednesday. I previously reported on the first part: his announcement that health care reform is making good progress, and that its guiding force, Anya Rader Wallack, is stepping down in six months. After that, the discussion turned to taxes, and the Governor’s opposition to raising taxes he doesn’t want to raise.

And as before, he failed to make a coherent case. He made a lot of false or misleading assertions, and spent a fair bit of time punching straw men. He even tried out a couple of new arguments, which were no more effective than the ones he’s back-burnered. And that’s been his problem throughout this legislative session: he has presented unpopular proposals without buy-in from top lawmakers, and he has made misleading (and worse, easily disproven) arguments on behalf of his plans. It doesn’t exactly engender a sense of trust, y’know?

I’m doing a blow-by-blow here, so if you don’t have the time or patience to wade through all this verbiage, I recommend Paul “The Huntsman” Heintz’ take on our gubernatorial tax colloquium.

And now, it’s time for Tax Talk with the Governor!

He began by saying that the House’s tax-and-spending plan “doesn’t do everything I want, but no budget does.” His overall assessment: “I think the House did a good job on the budget, and obviously I’m less pleased with the tax package.”

How displeased? “Exactly very displeased.”  

When pressed for “an analogy” by VPR’s Kirk Carapezza (those public radio guys and their liberal arts degrees), he unloaded a whopper.

If you told me that I had to jump from a window, I would go for the highest building that I could find to jump, to make sure that I wasn’t here to see that tax package become law.

I expected Sue Allen or one of his health officials to add a quick PSA on behalf of suicide prevention, but nope.

And then we got heavy-duty into the realm of embellishment. Starting with his wildly unpopular plan to slash the state’s share of the Earned Income Tax Credit, one of the most effective means of keeping low-income people out of poverty — and one of the most progressive elements of our tax system.

First, he disagreed with the portrayal of the EITC cut as a tax increase:

84 cents of every EITC dollar in Vermont comes from other taxpayers in the state. We are reallocating that money.

If you look at the lower income level, they pay very little income tax. Those at the top pay the most. So when you take the EITC and reallocate it, you’re reallocating 84 cents of every dollar from Vermonters who are paying taxes right now. You cannot call that a new tax, I’m sorry.

It is true that the lowest income levels pay very little income tax. It’s also true that they get hit hard by sales and property taxes. According to the Institute on Taxation and Economic Policy, our overall tax burden is distributed almost evenly across income levels: the bottom 20% pay 8.7% in state and local taxes. The top earners pay 8%. If you cut the EITC, income inequality will increase in Vermont.

And technically, the Governor is correct when he calls this a “reallocation” rather than a tax increase. But the truth is, it would take money away from the working poor. If you don’t want to call it a “tax increase”, then call it a benefit cut. Is that better?

Next question: “Do [EITC recipients] have the capacity to lose that portion, whereas wealthier Vermonters are tapped out?”

Listen. This we know. There’s a point of no return on progressive taxation. There’s a point where, as you know, income taxes are portable. I’ve argued this before. We know that Vermonters already migrate to Florida, New Hampshire, and other states to avoid paying income taxes. The higher your rates, the more they migrate. Right now we ask them to pay 8.9 cents of every dollar. I believe that that’s high enough, that we’re going to lose more than we gain.

Uh, first of all, the studies I’ve seen do NOT show that tax increases cause rich people to flee. There is, if anything, a very minor effect. People move for a wide variety of reasons; tax burden is low on the list. Things like family, job opportunities, and climate play a much larger role. As does “quality of government” and “availability of services,” for which many wealthy people are willing to pay. That’s why they don’t all move to Mississippi.

And second, we do NOT “ask them to pay 8.9 cents of every dollar.” The top income tax rate is 8.95%, but because Vermont is one of only six states to impose its tax on “taxable income” rather than “adjusted gross income,” the effective top income tax rate (according to ITEP) is 5.2%, not 8.95%.

The Governor continued, and kinda-sorta punted on his whole “tax flight” mantra.

Now, some will argue, they look at these charts and they say, well, you know, for all those 1207 Vermonters that you drive out, you bring more in at the same time. Well, I look at government the same way I looked at business. My job as Governor is to keep the customers we have, who are payin’ a ton of money to Vermont, and bring in more! If our 1207 or 1217 Vermonters went to 1317 or 1417, we wouldn’t have the revenue problems we have right now. Now, you can deny that if you wish. But income taxes are portable. We’re asking the wealthiest to pay the most. That’s what we should do. But you can’t ask them to pay twice. You just can’t. Because they won’t.

In other words, maybe rich Vermonters won’t actually move out, or maybe the vast majority will stay, but we might suffer a loss of in-migration among wealthy people if we raise taxes. Well, that’s a very different and absolutely unprovable argument.

At this point, the Vermont Press Bureau’s Peter Hirschfeld asked the same question I’d brought up last week: Shumlin’s comments to a New Jersey newspaper slamming Governor Chris Christie for refusing to raise taxes on “millionaires and billionaires.”

Let me be clear. I was encouraging Chris Christie to go to the high progressive income tax rates that Vermont has now.

At which point I jumped in and made the point about taxable income and AGI. Because New Jersey bases its income tax on AGI, it actually takes a substantially bigger bite from top earners than does Vermont. Here’s how the Governor responded:

Yeah, but you’re talking about averages.

And then he immediately pivoted back to his canned talking points about Christie.

Listen, here’s the point. I answered this one last week. Chris Christie has launched the biggest property tax increases which hits middle class New Jerseyites right in the teeth. He is one of the few Governors in America who hasn’t seen any job growth. This is a state where a Governor went out and said, ‘You elect me, and I’m going to do the New Jersey comeback.’ It’s been the New Jersey fallback. Higher property taxes, higher tax burdens, and dwindling job growth. That’s not a recipe for re-election.

Let’s leave the obvious point that this has nothing to do with Shumlin’s statement about taxing the rich, and go back to his “answer” to my question.

Yeah, but you’re talking about averages.

What the frak is that supposed to mean? Of course I’m talking averages. The average wealthy New Jerseyite paid an effective state income tax rate of 6.6%. The average rich Vermonter paid 5.2%. Yes, I’m talking averages. Is that supposed to be an answer to my question?

Now, New Jersey’s overall tax system is, in fact, substantially less progressive than Vermont’s. And one of the biggest reasons is that New Jersey has a much less generous EITC system than Vermont. Well, it does unless Governor Shumlin has his way.

Hirschfeld then came back with “You understand the confusion, though? When you say one thing down there and another thing up here?”

That is not true. I mentioned property taxes, I mentioned jobs in my comments to the Ledger. I mentioned all the things I just mentioned now. You’re picking one little piece out of an overall criticism of a four-year record. And I believe I’m right. And the Democratic Governors Association joins me in believing I’m right. We can elect a Governor who will grow jobs, grow opportunities, not see property taxes increase, not see jobs dwindle. That’s the point on Chris Christie.

Well, of course we’re “picking one little piece.” Because it’s the “one little piece” that’s directly at odds with one of the central policy pillars of the Shumlin Administration.  That’s what we do: point out inconsistencies and hypocrisies.

Paul Heintz then chimed in: “But are you contesting that one piece that Mr. Hirschfeld is bringing up?”

Team, sometimes I think I’m on a comedy show. I’ve answered the question. As you know, I firmly believe that Chris Christie isn’t the rights Governor for New Jersey because he’s not growing jobs, he’s not growing economic opportunities, property taxes are rising, and the middle class is getting kicked in the teeth.

Yeah, Governor, and sometimes I think I’m in the Twilight Zone. We keep asking the same questions because you keep dodging them.

And this is when Sue Allen said “Thank you,” signaling the end of the news conference. Channel 5’s Stewart Ledbetter actually got in one more question — a softball about Shumlin’s views of marriage equality. He was happy to answer that one, but he’d clearly had enough of our tax questions.

As we left the room, one of my fellow reporters jokingly asked me if the Governor had “answered my question.” I said yes, in the sense that he followed my question with a series of words that ended in a period.  

In no other sense did he answer the question. But that’s been a consistent pattern on tax issues this year: shifting, and unconvincing, rationales and arguments. If he truly wants to get the Legislature on his side, he’s going to have to do a better job of stating his case.