Public Assets President’s Testimony Supports Tax Restructuring, Not Cuts, To Keep Pensions Whole
In testimony this week to the Pension Task Force, charged with drafting a proposal(s) to ensure funding for the state employee, teacher, and trooper pension plans, Public Assets Institute President Paul Cillo offered a proposal to address the issue that doesn’t involve cuts to existing pensions.
From Cillo’s Remarks:
It is true that most Vermonters pay enough in taxes. But that’s not true for all Vermonters. Many Vermonters at the top, with much greater amounts of discretionary income, still pay less as a percentage of their income in state and local taxes than their lower-income neighbors, according to a 50-state analysis by the Institute on Taxation and Economic Policy.
Additionally, the 2017 federal tax cuts left $500 million in formerly collected federal taxes in the hands of Vermonters—most of it in the hands of the top 20 percent of taxpayers. This is money previously paid in taxes that is no longer being collected—$500 million each year.
So the suggestion that all Vermonters are overtaxed is not true. A revenue strategy targeted to those at the top could raise additional needed revenue without hurting those who already pay enough. Specifically, a one percent surcharge on the income of the top one percent of Vermont taxpayers would raise about $33 million, three percent would raise $100 million. As you’ve heard from Graham Campbell, eliminating Vermont’s capital gains exclusion would raise another $15-20 million per year.