Taxes: Here we go again

Looks like we’ll be seeing a 2014 rerun of an especially dispiriting battle from the 2013 legislative session: a standoff between the Democratic Legislature and Governor Shumlin on taxes.

Last spring, lawmakers launched a veritable flotilla of taxation trial balloons only to see them blasted out of the sky, one after another, by Big Pete’s absolute (yet conveniently conditional) no-tax-increases stand. The last iteration was a proposal to impose a cap on itemized deductions, which would have raised taxes on top earners while cutting lower-bracket rates in order to make the plan revenue-neutral. Seemed like a no-brainer, but the Administration shot it down, claiming that it was too late in the session to bring up a new idea.

(Even though the idea had been proposed two years earlier by the Blue Ribbon Tax Commission.)

Over the summer, Shumlin et al cooked up a new excuse: we shouldn’t tinker with the tax code in the year before we’ll have to create a new tax structure for single-payer health care.

Which kicks the can, not only past 2014, but also past 2015. Because obviously, we’ll be too darn busy in 2015 to consider any non-health-care related tax proposals.

House Speaker Shap Smith isn’t buying it:

“If income tax reform made sense in 2014 I think we would do it in 2014,” Smith said. “It wouldn’t matter that we had potential financing for health care coming in 2015.”

(Smith supports the concept of a deduction cap; Senate President Pro Tem John Campbell, a.k.a. Shumlin’s Doorstop, is ambivalent but leans toward the Administration’s point of view.

The latest twist, as reported by Peter Hirschfeld (of course) in the Mitchell Family Organ*, is that legislative leaders are actively pursuing the idea and the Administration seems to be withholding important data.

*Paywall alert. Story published in the 10/31 print editions.

From lawmakers in its own party.  

Let’s go to the Hirsch:

Shumlin has made numerous cases against the plan, saying Vermont risks tax flight if it increases burdens on the rich, and also that lawmakers couldn’t guarantee revenue neutrality. Based on 2007 tax data, Shumlin said, the proposal would actually result in a $10 million tax increase on the whole.

… Rep. Janet Ancel and Sen. Tim Ashe, heads of the House Committee on Ways and Means and Senate Committee on Finance, respectively, are working on getting solid numbers. Complicating that effort is the Legislature’s inability to secure from the Shumlin administration the tax data that would provide the foundation for that analysis.

(Italics mine.)

Looks like a stonewall to me. But I dunno, maybe retrieving the tax data is just too darn hard for the Administration. It does have the convenient result that Shumlin can continue to oppose the measure “based on 2007 tax data.”

I guess we’ll have to wait until 2019 to have this debate based on 2013 data.

At a meeting of the Committee on Ways and Means Friday, Ancel will ask Administration Secretary Jeb Spaulding to help her retrieve that data.

“Friday” meaning today. Get your popcorn.  

3 thoughts on “Taxes: Here we go again

  1. Responding to an op ed by Paul Cillo with his own uber long op-ed, Spaulding takes umbrage with treatment of the Administration from both sides of the aisle:

    …what is an Administration to do?

    (You can almost smell the burning ironing board as the harried housewife faces the camera.)

    I don’t agree with his arguments against a more progressive tax policy, but I feel his pain.  No one likes to be the only kid not picked for a side in dodgeball.

    But the tone is petulant and undignified and will convince no one that the Administration is being treated unfairly by its own party.

  2. he takes great umbrage — beginning to sound like a staged smokesceen to conceal Shummy’s strawman & complete load of bs designed to continue the coddling of the wealthiest 1-3% of Vermonters who receive a windfall due to VT tax code policies & who will play a role in financing any further political goals Shumlin may have.

    That the wealthy will flee Vermont is not only specious, it’s not going to happen. A conjured big scary monster and another bogeyman. They are in VT for a reason & the tax code is only part of it. Their options for lower taxes will come at a price. Those states have maaany downsides as has been reported here before. People don’t like to sell out & move. My situation is far from ideal but we keep muddling along b/c the alternatives present great uncertanties. We have enough problems w/o seeking more.

    Two different approaches, Snelling:

    all emphasis added

    Separate from the values it reflects, Snelling’s statement reveals his management approach: manage to results. By starting with a commitment to standards, his job and that of his budget staff was to balance the state budget without compromising the state’s standards.

    Douglas, Shumlin:

    This approach stands in marked contrast to the one adopted by Govs. Douglas and Shumlin over the last decade. Managing to results has been replaced by managing to the money which focuses on spending only the money that is available at current tax rates even if it means failing to meet essential state goals or compromising the state’s standards

    http://vtdigger.org/2013/10/20

    So, reform has been done successfully before & according to this Digger story, Republican Snelling was able to find a fiscally sound method to include the services for all Vermonters. However Shumlin has continued the draconian policies of Douglas; commitment to level funding even if it means cutting services or eliminating them. Attempting to balance the budget on the backs of the Vermonters who can least afford it while favoring policies which generously compensate wealthy friends who also have an added advantage of Obama making all or some of Bush tax cuts permanent providing a double-dip from tax coffers.

    The ever poorer middle class bears the most financial brunt and these are ones who they are hitting up. It’s time to put the kibosh on this great inequity at least here in VT.

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