Close The Salisbury Fish Hatchery?
Not Fully Fund Vermont State University?
Cut Nine Positions From The State’s Attorney’s Office When More Public Safety Assistance Is Needed?
Reject Filling Badly Needed Positions In The Vermont Judiciary?
Why? There’s A Better Way. Pass H. 828!
There is legislation (H. 828) currently being debated at the State House that would impose new taxes targeting Vermont’s wealthiest residents, with goals of tackling growing income inequality and ensuring the rich are paying their fair share.
According to a January CBS report about the proposed legislation, Vermont isn’t the first state to propose “wealth taxes,” with eight states last year proposing to add levies on the rich with the goal of raising billions to fund social programs. In 2003, Massachusetts instituted a so-called “millionaire’s tax” that added a 4% levy on annual income above that threshold. The revenue raised from the tax is paying for free school meals among other uses.
Across the U.S., the rich generally pay a lower share of their income in taxes than low earners, according to the Institute on Taxation and Economic Policy (ITEP). A recent analysis by the left-leaning think tank found that the average effective state and local tax rate paid by residents to their home state is 7.2% for the top 1% of earners; for the lowest-earning 20%, that rate tops 11%.
In Vermont, the top 1% pay a combined effective tax rate of 10.1%, while residents with income between $83,300 and $135,900 have a tax rate of about 10.5%, ITEP found.
“The wealthiest Vermonters are paying lower rates than some middle-income earners,” ITEP research director Carl Davis tells CBS. “We know that wealthy people receive a huge share of overall income, and so choosing to tax all that income at lower rates can really impact states’ ability to fund schools, parks, infrastructure and every other public service.”
Myth: The Wealthy Will Flee
ITEP’s Davis explains to CBS that wealthy Americans actually move less frequently than the broader population “because they’ve already found economic success.” Instead, the people who move to new states tend to be people who are pursuing better wages, cheaper housing or want to be in a warmer climate.
“We’ve all heard the anecdotes about rich people moving because they didn’t like their tax bill, but the data tell us that these stories are exceptions, and it’s not happening on a wide scale,” Davis said.
At least some research supports that view. In a 2016 study that examined the tax records of every U.S. millionaire over more than a decade, Stanford University and U.S. Treasury Department researchers found that only 2.4% of millionaires migrated to another state over that period, compared with 2.9% for the population at large.
“The most striking finding of this research is how little elites seem willing to move to exploit tax advantages across state lines in the United States,” they wrote at the time.
TAKE ACTION!
Call Your Representatives Today And Urge Them To Balance The Budget On The Backs Of Vermont’s Wealthiest—For Once!
Support H.828*
*Bill is currently under discussion in the House. Would increase taxes for people who have $10 million dollars in assets.