Vermont AFL-CIO: Tax Fairness: An Answer to State Budget Problems

Big thanks to the Vermont AFL-CIO for issuing the following statement of support for VSEA members:

Vermont State Labor Council, AFL-CIO
For Immediate Release: February 24, 2015

Vermont AFL-CIO:
Tax Fairness: An Answer to State Budget Problems

       

The Vermont State Labor Council, AFL-CIO asks Vermont lawmakers to respect the collective bargaining process. The current state employees’ contract is a compromise agreed between the Administration and VSEA. To seek a reopener is to challenge the fundamental principle of collective bargaining. If wealthy private contractors and ski resorts aren’t expected to open their contracts, why should state employees? The Administration’s threats of furloughs and mass layoffs must stop.

If Vermont’s legislators are serious about addressing income inequality, the solution cannot be extracting millions in concessions from working families while Vermont’s overall regressive tax code further exacerbates inequality.

Our economy is growing, thanks in part to increased worker productivity, but working people are not seeing the fruits of our labor in higher wages. The gains are going to those at the top, who are receiving more of the state’s total income. On average the top 1% of Vermont taxpayers receive 18.1 times as much income as the bottom 99%.

Yet the wealthy pay far lower tax rates than middle-income Vermonters, unnecessarily squeezing our state budget, and putting more tax pressure on the rest of us. Revenue lost because of rising inequality and regressive taxes have led to underfunding investments in public employment and higher education, skimping on public services, especially for those at the bottom of the income ladder like people with disabilities and LIHEAP recipients. But it hits all of us as services deteriorate and needs go unmet.

Taxing the top 1% at the same overall rate as middle-income Vermonters would generate an estimated $52 million in additional revenue, while taxing the top 20% at the same rate would generate $144 million from tax fairness. The capital gains tax exclusion alone costs Vermont $17.3 million. Vermont should generate sufficient revenue by fixing inequities in our tax code.

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