Wealthy Vermonters Continue to Say, "Raise Our Taxes"

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A group of wealthy Vermonters is pledging to keep up the heat on Gov. Peter Shumlin and legislative leaders in an effort for someone, anyone, to raise their taxes before session's end as a way to close Vermont's budget gap.

Now, these folks aren't up for shouldering the entire $176 million burden, but would be OK with a temporary surcharge on their own millions to help the state out of its fiscal crunch. Mostly, they want to ensure that vulnerable Vermonters don't have to bear that burden.

About 50 well-heeled Vermonters sent the governor a letter (pasted below) on March 22, and which I reported on in last week's "Fair Game."

The gov was asked about the proposal — again — at a legislative breakfast in Middlebury. According to attendees, Shumlin stood his ground on his pledge to not raise taxes on Vermonters for fear that those able to do so will take up residence in New Hampshire, or warmer climes such as Florida. Neither of those states collects income tax. I guess that would leave less-mobile Vermonters who to shoulder any cuts or targeted tax increases.

This topic also came up on today's "Vermont Edition" on Vermont Public Radio, when one caller — claiming to be a wealthy Vermonter — asked Senate President Pro Tem John Campbell if he had read the article and would support raising taxes on the top 5 percent of wage earners, as proposed by H.401 --sponsored in part by Reps. Chris Pearson (P-Burlington) and Paul Poirier (I-Barre CIty). Sen. Anthony Pollina (P/D/W-Washington) supports a similar measure in the Senate. A third proposal by Sen. Tim Ashe (D/P-Chittenden) would create an alternative minimum tax in Vermont. In 2009, according to the tax department, 300 Vermonters earning $100,000 or more paid zero income tax. That includes seven millionaires.

Campbell sidestepped the question and instead focused on the fact that lawmakers are looking to cut services in a way that doesn't impact direct services for vulnerable Vermonters.

With several weeks to go until the end of the session, it seems unlikely that legislative leaders and the governor will raise anyone's income taxes. And, given that next year is an election year, I highly doubt they'll be calling for a tax increase then, either.

Curious about who signed the letter? I pasted it below.

* * *

March 22, 2011

Dear Governor Shumlin,

We are Vermonters who share your long-term goals — sustainable energy, good jobs and the nation's first single-payer system. We have also had the good fortune of prospering in our beautiful state. And we are increasingly concerned about our neighbors who are not so fortunate and are struggling to survive these difficult times.

We strongly support H.401 and its companion proposal in the Senate, proposals which would reverse a small share of the Bush-era tax cuts on wealthy Vermonters to help meet basic human needs, and we ask you to join us. This proposal would both help our neighbors and strengthen our long-term economy.

You support ending Bush-era tax cuts for the wealthy on the national level but think wealthy Vermonters would leave our state if we acted alone. This is a mistake. People like us, with good jobs and careers in Vermont, would not leave our homes, friends, careers and the state we love if asked to pay a bit more to help our neighbors. Doing what we can to help others is the Vermont way. Even the Blue Ribbon Tax Committee found no evidence that taxes result in flight. And we know cutting needed services will cost us all more in the long run.

As you know, H.401 would raise a relatively small amount of money ($17 million) given our state deficit and the fact that the wealthiest Vermonters (top 5 percent) will receive a $180 million tax cut this year thanks to extension of the Bush tax cuts. But that money will go a long way in helping vulnerable Vermonters through these hard times.

In difficult times we talk about sharing the pain, but it is not just fair [for] the most vulnerable to bear the greatest burden. We love our state and will contribute our fair share to keep it a great place to live … for everyone.

It is the Vermont way.

Signed,

Elizabeth Skarie and Jerry Greenfield
Ellen Oxfeld and Frank Nicosia
David Blittersdorf
Jeffrey and Sheila Hollender
Ron and Jessica Liebowitz
Don and Mary Ann Horenstein
Melinda Moulton
Bess O'Brien
Jay Craven
Mary Sullivan
Ben Cohen
Judy and Mike Olinick
Peter and Joann Langrock
Crea and Phil Lintilhac
Dottie Deans and Lydia Spitzer
Don Mayer
Robin Lloyd
Diana Bingham
Alison Byerly and Stephen Jensen
Mike and Tawnya Kiernan
Chris Lloyd
Emily Joselson
Eleanor Mille and Dale J. Jaffe
Ginny and Bruce Hiland
Paul Millman
John and Mireille McWilliams
Carole Cavanaugh and Nobuo Ogawa
John and Amy Emerson
Amy Briggs and Daniel Scharstein
Sallie Sheldon
Ed and Huguette Knox

Comments

[ClearEyesTG11]

Shay,
Edmund Burke - Irish politician and statesman - stated, "you cannot indict a whole people...." And so these fair-minded and responsible Vermonters give proof to Burke's point by demonstrating that not all rich people are contemptible, greedy and selfish Darwinians with an unquenchable thirst for MORE.

[sammy]

This group is so full of shit. If they were serious, they would just over pay their current taxes to make up the budget shortfall by writing big fat checks. If you want to help out, then help out now. Why wait for the windbags in montpelier to pass a law? Just write the check and get it done. Put your money where you mouth is Ben & Jerry, 7th Generation, Small Dog, Ms. Moulton, etc.

[Helen]

I wish I was in a position to overpay my taxes to help out my lovely state.

I have, unfortunately, over paid before (on accident), and I've gotten a check right back, so I'm sure a decent amount of finagling would need to be done in order to make sure that the money stayed with the state.

[gimmeabreak]

Really, why don't these self-congratulatory and holier-than-thou people just pony up a few extra mill themselves and shut the hell up? This is all about proving to everyone else how great and wonderful they are.

[reelvermonter]

Sammy and Givemeabreak are way off base for many reasons. 1. Helen has it correct, one can not simply overpay taxes. They send the overpayment back to you. 2. The group of signers are genuine Vermonters who understand their abilty to pay and comprehend the concept of taxation based on abilty to pay. 3. They are also a generous group who give to many good causes in Vermont and beyond.

Instead of ridiculing this group we should all be applauding their willingness to step up to the plate. I suspect there are many others willing to pay just a little more in order to ensure the safety nets a few of our neighbors need.

I thank all the signers and urge Governor Shumlin and our legislative leaders to listen to their call for action. It is the right (CORRECT) thing to do!

[Jimmy]

Fascinating enough to write two essentially identical articles about. Not interesting enough to do it within two weeks of when it actually happened.

[Jcarter]

I agree with the fact that one can not simply over pay their taxes. Legally I believe the state is required to return over payments. I also am a firm believer that each person should pay their fair share, not that one group should pay more or less. There are many ways this can be accomplished on both sides. For example, many businesses pay their taxes April 15th when they come due. Many individuals overpay all year and get a refund. The difference is interest earned by the state throughout the year. A refund (over payment) amounts to an interest free loan for the state, or if kept in an interest bearing account free money. The wealthy in this letter could switch such that they were overpaying throughout the year, although it would be refunded the state would collect interest and it would amount to a small but meaningful increase in funds.

The second is the AMT, it is a tragedy that people earning large sums of money manage to find enough cuts/loopholes so they pay zero tax. It amounts to government endorsed theft. Changing the way tax is calculated could rectify this situation and would be the easiest way to enact change.

Finally, and the most preferential solution to me at least, would be to enact a flat tax that is tied to the budget. No deductions, no cuts, no exemptions. Straight up you grossed X dollars, every last person in this state pays Y% of that to the state. Mail in your taxes on a post card. That is true equality, and satisfies our state constitution which states that every citizen is bound to contribute their fair portion. The percentage would be determined each year to account for overall spending.

Ex.A) you gross 30,000 * 3% = $900
Ex.B) you gross 150,000 * 3% = $4500
Ex.C) you gross 500,000 * 3% = $15000
Ex.D) you gross 15,000 * 3% = $450

Since it is a straigh tax with out deductions etc, it could be directly taken from all pay, every pay check would have a deduction accordingly, in fact in that case you wouldn't even need to file a tax return.

According too http://www.usgovernmentrevenue.com/Vermont_state_revenue.html for 2010 revenue from Income tax will be $0.62 Billion. In 2009 there was a reported total personal income of $24.261 Billion meaning the flat tax rate would have been 2.55%. Considering, the tax rate hovers around 8% depending on income levels, there is a pretty significant change for a lot of people, or put another way, there are a lot of deductions and loopholes people are using to avoid taxes.

A benefit of this would also be that the state could promote that tax rate as a low income tax rate compared to other states, which would also boost at least perception.

[gimmeabreak]

There was absolutely, positively no necessity for this group to write a "public" letter. They could have written privately to Gov. Shumlin and the Speaker and President Pro Tem. They wrote publicy because they wanted to be recognized for the great and wonderful people they truly are.

I think it also somewhat misleading to say you can't "overpay" your taxes. Maybe you can't overpay your taxes, but I believe you CAN voluntarily donate to the federal budget. So it's not like these wonderful citizens are without a way to pay more if that is what they are so desperate to do. To these heroes, I say, go for it, leave the rest of us alone, and enough with your self-glorification already.

[Jcarter]

Gimmeabreak,

You are correct in that you can contribute (online as a matter of fact) to the federal DEFICIT. Not necessarily to the budget and in fact not to the State that I am aware of. Of course donating to the federal deficit isn't really helpful to the state either which is what these people are attempting to do.

Moreover, these people wrote a private letter to Shumlin, it wasn't a letter sent to the BFP to be made public. Not sure how it became public but from this article "About 50 well-heeled Vermonters sent the governor a letter"

I suspect is a FOIA thing but I don't know how you came to the conclusion it's a publicity stunt...

[Buster]

I agree with those who say that these people should find a way to donate to the state if they are so eager to get rid of their money. It is odd that they are asking to be forced to do it.

Second, keeping the top rate down will make us more competitive (read the Blue Ribbon Tax Structure Commission report). When I sell my business, I can avoid Vermont's taxes by moving away and then selling the shares. This is not good for Vermont, and I may prefer to stay. But I am not sure yet what I will do.

Third, almost all new jobs are created by entrepreneurs. We have to keep the rate low enough that they will be willing to move here or start businesses here.

Finally, with our very progressive income tax system, Vermont already targets the rich. It is important to remember that the lower half of our population, by income, pays fairly low income taxes compared to other states.

[gimmeabreak]

Jcarter:

Below is part of what Shay wrote in Fair Game last week (3/30/11). It's hard to conclude that they DIDN'T intend their letter to be a public document:

"Elizabeth Skarie and her ice-cream-magnate hubby Jerry Greenfield signed the letter and helped organize the lobbying effort. Major Democratic donors Dottie Deans, Melinda Moulton and Phil and Crea Lintilhac, also endorsed the letter, as did key Shumlin donors David Blittersdorf and Jeffrey Hollender.
Both the governor and the legislature rejected the proposal last week. Shumlin stood firm on his pledge to not raise income taxes, and the House voted down a $30 million income-tax hike on wealthy Vermonters 117-23.
Still, the group isn’t going to give up easily. “We’re still hoping to get more people to sign,” Skarie said. A new letter is in the works, too, that will be mailed to all 30 Vermont senators."

[Jcarter]

I don't see anything in your quote that suggests this was a public letter.

Regardless, who cares? I really don't, nor do I believe that the main motivation behind the letter was to garner sometype of public recognition.

The point is, or at least should be, that we have a huge deficit, no will to make meaningful cuts, and no one with the brain power in Montpelier to fix the friggin problem.

[Tim]

"Oh Lord, won't you buy me a Mercedes Benz ?
My friends all drive Porsches, I must make amends.
Worked hard all my lifetime, no help from my friends,
So Lord, won't you buy me a Mercedes Benz ? "

http://www.azlyrics.com/lyrics/janisjoplin/mercedesbenz.html

[Mona Sterry]

Jcarter, a letter to the Governor and the entire membership of the state senate is a public letter. Especially when Skarie then comments about it to Shay Totten.

And I guess I'm a little more sensitive than you are. This is a bunch of guilty rich baby-boomers publicly flagellating themselves and hoping they can get into heaven despite their swell homes and imported cars and wonderful foreign vacations and shiny, happy children and nannies and personal assistants.

But ultimately you're right, the issue is not how will we fund the government we have, but who has the guts to reconfigure the government.

[sammy]

Why does having a nice home and a fancy car exclude you from heaven?

[mona sterry]

Ask Mark. Chapter 10, verse 25.

[David Zuckerman]

I've been to Elizabeth Skarie and Jerry Greenfields house. It is very very modest.

There certainly are some wealthy with large homes as well. But the folks on this list that I know (a couple of them), are actually not self flagellating, but understand that their wealth came from a combination of hard work, good ideas, and a societal framework that allowed for their efforts to pay off big. They recognize that a civil society with good roads, good schools, a reasonable safety net actually help keep our economy strong.

We are all in this together. Individually we can float up or down some, but the reality is that most of us are sinking because the system has shifted so far in favor of concentrating the wealth. The last time our tax system and income concentration was as it is today was before the great depression. There needs to be a larger middle class. Instead we are all fighting over the scraps.

[gimmeabreak]

"the system has shifted so far in favor of concentrating the wealth. The last time our tax system and income concentration was as it is today was before the great depression. There needs to be a larger middle class. Instead we are all fighting over the scraps."

That may be true nationally, but it is absolutely, positively not true in Vermont. Vermont already has probably the most progressive tax system in the country. You are fighting in the wrong place. Go fight your fight for tax equity in DC.

[Jcarter]

@Mona,
You are correct that writing a letter to the gov and senate can be made public. But saying that was their intention is incorrect. I used to write Douglas all the time, sure that letter could be made public, but it was never my intention to do so... merely it was to advocate for a stance on a particular issue. But you are correct these people's wealth does not bother me in the least. I am low middle class, and yet through hard work I am moving up not down. I will live a comfortable life that provides for me and my family. I'm not going to be jealous someone else has already gotten there regardless of whether they worked for it or inherited it. Why worry about others, don't we all have enough to worry about in our own lives?

@David,
" that most of us are sinking because the system has shifted so far in favor of concentrating the wealth."

Swing and a miss. You are correct we are sinking because the system has shifted, you are incorrect about which way it is shifting. High taxes due to overspending and out of control entitlement programs has shifted what was the lower middle class in to poverty, the upper middle class has become the lower middle class now fearing they too are headed into poverty and the wealthy have remained wealthy because they have the ability to do it giving the inflated numbers we are seeing now. Your progressive policies are the cause. The government holding everyone's hands only makes the general public beholden to them. 100 years ago, this wasn't the case, it was sink or swim and (gasp) most people swam. People in general are lazy, if you are going to give everyone a floating they are going to lay there and bask in the sun. While I recognize the need for most of these programs until, unfortunately we need to find a Legislator with the balls to reform them and end the abuse. Until then, it appears we are destined to the same knee-jerk and lazy way of balancing the budget...meaningless decreases in funding while ignoring the herd of elephants in the room.

[Jcarter]

As for taxes, the problem is with the cuts/exemptions/loopholes which are designed to obscure the true costs of gov't and programs. Much as school budgets are black boxes due to ACT 60/68 so is the overall tax structure. We need a flat tax so that every single person can determine exactly what their share is and exactly what every single new spending item is going to cost them. When someone proposes a increase in X program of $Y million the populace should be able to determine what that cost is going to be out of THEIR pocket. Same with the school system, a school budget should represent the true cost to the taxpayers. Not what is going to get sent to Montpelier shuffled around a bit and then sent back. Same with the "equalized pupil" crap. It's just smoke and mirrors for the school boards to hide the real cost to educate the student body by artificially inflating certain numbers.

Ridiculous. For all the talk of open government there are not a lot of steps being taken to do so. More political rhetoric.

[Suzie]

@David Z: perhaps you are 'sinking' because you've chosen to be a farmer. It isn't rocket science man, farmers don't make a lot of money. But that's your choice, so go for it. But why should the rest of us have to help to along? Why are we responsible to save you from sinking?

[Jimmy]

Zuckerman, why don't you ask your friends on that list why they don't directly contribute their share of that $17m - or more - to state programs and get back to us.

Also interested in why there have been two 7D stories about this now and not one question to a top 5% earner who didn't sign the letter, and why not. After all, writing a letter like this with dozens (if not hundreds) of names conspicuously absent would only seem to support Shumlin's assertion that higher taxes would drive top earners away. You don't have to go to journalism school to know that presenting both sides of a story makes an article like this infinitely better.

[gimmeabreak]

@ Zuckerman:

"I've been to Elizabeth Skarie and Jerry Greenfields house. It is very very modest."

Fair enough, but do they only have the one house you visited?

And do they work for a living, like me, or do they live off the profits of the sale of B&J's to Unilever a decade or so ago?

This reminds me a little of Al Gore, who jetted around the world a few years back, to lecture anyone who would listen, on the dangers of global climate change, while gulping down absolutely obscene amounts of jet fuel on his private jet and spewing tons and tons and tons and tons of carbon dioxide into the atmosphere, and meanwhile owning 5 or 6 different houses, including his "main house" in Tennessee that reportedly, by itself, consumed 10 times the amount of energy as the average American family.

[David Zuckerman]

Glad to have generated so many comments.

@jcarter- actually, the tax rates and effective tax rates for the wealthy (when all taxes are included) have dropped tremendously in the last 60 years. The combined tax rates and effective tax rates on the upper middle, middle and lower income classes have gone up. None of this has to do with the spending side of Government. The reason the effective taxes have gone up is because as the national income tax rates have been cut for the top, all of the other taxes (primarily state and local) have had to go up to make up for the increased need to fund services locally.

I do agree with you on the tax exemptions and loopholes, especially because (again) they are used primarily by those with higher incomes as well.

I employ people every year, I understand the issues around work ethic, focus, responsibility. But for those things, people need to be compensated responsibly as well. But with the overall disposable income for most Americans shrinking, there is less money for spending on basic needs (and therefore less money to pay those employees as well as they deserve, including my own).

@Suzie As for what I chose to do, that is my business and I am not complaining about my situation. I am quite happy with what I have chosen. I am not asking for help. My barns are fully insured.

With respect to Gore travelling, I can not speak for him, but I think the point is well made.

As far as I know (and that is not very far with respect to this point), Jerry and Elizabeth live modest lives. I don't know whether they have another house (or 6). I don't begrudge them living off their work from the past (they had loads from B and J before the Unilever take over). They care about and invest their time in the local (and some national) community issues. I think that should be applauded. They are decent people who are raising a family. I thought that was what family values was all about.

[Jimmy]

"the tax rates and effective tax rates for the wealthy have dropped tremendously in the last 60 years."

60 years is a convenient number, as the top marginal tax rate was 91% back then. Is that where you're suggesting we should go?

As I'm sure you know, effective tax rates have only been tracked since 1979. The effective tax rate for the top 1% of earners has fluctuated between 25.5 and 37.0 during that time; it is currently 29.5.

Nice shot at Pete's Greens, BTW. Keep it classy.

[Jcarter]

Sorry David,
I'm inclined to disagree as I think most American's are, that gov't spending isn't the problem. As for VT, I also disagree that the tax rate has changed significantly or tremendously for anyone outside of middle income homeowners. That group has seen tremendous increases in tax burden in the form of property tax, gas tax, tobacco tax, sales tax, breathing tax, farting tax, and meals tax.....effectively speaking.

To ignore the spending side is just plain out of touch and wrong. As you point out...relitively speaking disposable income has decreased... mainly because wages stay the same while gov't spends more and more and more enacting fee after fee after fee decreasing disposable income. Plain and simple, everyone speaks how Social Security or Pensions are unsustainable, ignoring what is really unsustainable, which is Government. Unless drastic and meaningful changes are made, the bubble that is government will burst in the same fashion as we have seen in other countries.

[Mull-it]

As to why these folks don't just donate extra: because that would do nothing to change the system. Making a public statement is an effort to change the system. You can agree with their ideas or not, but that's what they're doing, making a political argument.

[Tim]

You can give extra, at least to Uncle Sam. He's shameless:

:
http://treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance

"How do you make a contribution to reduce the debt?
There are two ways for you to make a contribution to reduce the debt:

•You can make a contribution online either by credit card, checking or savings account at Pay.gov
•You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it's a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

Note: The Bureau of the Public Debt's Office of Public Debt Accounting maintains this FAQ. Keep in mind that these questions may not fit all situations and are only intended as a guideline. "

[Jimmy]

"As to why these folks don't just donate extra"

Are you a signer of the letter, Mull-It? The letter states "We love our state and will contribute our fair share..." after stating that their fair share is more than it is now. How many of these people will directly contribute to state programs to offset budget cuts after H.401 fails? Because that's EXACTLY what they're saying they will do. I'm going to guess that the answer begins with a z and ends with an o.

[Eric Benson]

I find this letter hypocritical in a few respects:

** Several of the individuals singing on this letter are not Vermont residents for tax purposes. It's easy to advocate for higher tax rates when a sizable portion of your income is sheltered from the VT tax department.

** These folks receive a large part of their income from capital gains income, which is taxed at a significantly lower rate than ordinary income. This income would not be impacted by the proposal they are supporting.

** Some on this list benefit directly from funds from State and Federal grants, which are of course paid for by the tax payers.

Anyone classifying individuals who earn $100k per year as "wealthy" is simply out of touch with the true costs of living in Vermont.

A working class family earning a $100k salary is paying many taxes already, including social security tax, medicare, medicade, Federal income taxes, VT income taxes, property tax, sales tax, and health care premiums.

A minimum of $10k per year alone is spent on property taxes for a home in Chittenden County.

Meanwhile, young, working aged, able bodied "low income" Vermonters receive tens of thousands in tax free subsidies for goods and services, which is topped off by an "earned income tax credit" each year that pays them thousands of dollars in cash from a tax refund.

Low income subsidies include: food stamps, housing assistance, heating fuel assistance, telephone/cell phone subsidies, day care subsidies, transportation subsidies, free health care, free job training, 100% Federal income tax refund, 100% VT income tax refund, 100% property tax refund, earned income tax credit, etc...

[Buster]

If the group really wants to help just donate a million each and set up a nonprofit trust to pay for
Vermonters in need health care. It would be simple tax deductible and take the burden off the State. duh.. cmon if these peolpe are really serious there are ways to begin by starting foundations that overlap the public sector. Otherwise this is just another Bull puckey marketing ploy like Ben and JErrys 1% for peace. B efore those shysters opened an icecream stand you could take an entire family out for a cone for a buck and half. They turned icecream into a screaming event at 25bucks a gallon.

[Elizabeth Skarie]

Why so negative? We have one home and, until taxes become more progressive, we donate extra money to nonprofits.