The Governor’s Administration and the Legislature currently focus on the amount of revenue expected when building state budgets, instead of the needs of Vermont residents. As a result of this focus on revenue rather than needs, state programs and services are chronically underfunded. Even as demonstrated needs are increasing, there has been no adjustment to the Vermont personal income tax rates for years. At the same time, wealth and income inequality has grown, resulting in a population of wealthy Vermonters who are able to pay significantly more in taxes than they currently are. The state must raise revenue from those who can afford to pay.

The Alliance supports Fund Vermont’s Future’s “Fair Share for Vermont” Proposal, which would increase the tax rate for Vermont taxpayers earning more than $500,000. This tax increase will not only generate approximately $100 million for the state to improve public goods and services but will also demonstrate that raising progressive revenue is possible, paving the way for the Legislature to build a future for all Vermonters based on abundance and prosperity.

Results: House passage of Bracket Change, Wealth Tax Study

In April the House passed H.829, a bill supporting the creation of affordable housing. To raise the required revenue, the bill included a new income tax bracket for marginal income over $500,000. The bracket would have impacted the top 1.1% of Vermont taxpayers and raised over $74 million annually. As the Senate did not take up the bill, the proposal was not passed this year. However, advocates will look to build on the support of the House in the next biennium.

A proposal to tax growth in assets for taxpayers with over $10 million of net worth was included in H. 827, which was introduced in January. The House Ways and Means Committee later proposed to create a study committee on the wealth tax policy, and included language to that effect in H. 546, the miscellaneous tax bill, when it passed the House. Unfortunately, the study language was removed by the Senate and not included in the final version of the bill. In the coming months, Fund Vermont’s Future will be working with legislators and leading experts on wealth tax policy to continue studying the issue. FVF recognizes and appreciates the House’s leadership on fair taxation.

LEAD ORGANIZATION: Fund Vermont’s Future Campaign

Data and Talking Points

• The “Fair Share for Vermont” proposal will create a 3% surcharge on annual personal income over $500,000, which will generate $98 million in state revenue each year.