Administration questions complex tax plan

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Administration questions complex tax plan

Fri, 03/02/2018 - 4:44pm -- tim

Vermont Business Magazine Governor Phil Scott’s Communications Director Rebecca Kelley today issued the following statement on H911, a bill that would combine the Governor’s Working Family Taxpayer Protection Act and his social security tax relief proposals with the House Ways & Means proposal to raise income taxes to fund education.

“Last month, Governor Scott presented a proposal that would ensure Vermont’s working families don’t see an unanticipated $30 million tax increase due to Federal tax reform and how Vermont’s tax code is currently linked to the Federal tax system. The Governor’s plan protects working Vermonters from a tax hike, maintains our progressive tax structure while simplifying the tax code, and makes us more competitive with other states by lowering tax rates.

“While the Administration is encouraged to see the Legislature take up this proposal to insulate Vermont taxpayers from this inadvertent tax hike – along with the proposal to eliminate the tax on social security benefits for low and moderate-income Vermonters – it’s unfortunate they’ve tied it to a complex education finance reform bill that eliminates many of the benefits of the Governor’s proposals by adding a new income tax for education and more confusion to our education tax system.

“The education finance proposal included in the House proposal introduces a new income tax surcharge on all Vermonters, negating the gains made by the Governor’s income tax proposal. Further, it does not adequately address rising costs or implement reforms to our education system to address the fact that we have, on average, three fewer students in our schools each day. That means, under the House proposal, Vermonters will continue to see those costs – and the taxes necessary to cover them – rise faster than wages, despite steadily declining student enrollment.  

“The finance proposal included in the House bill simply changes how many pockets we’re paying out of – not how much is being paid. This approach continues to deny our kids educational opportunities because it forces Vermont down the same old path of unsustainable tax increases. This is why Governor Scott has been clear he will only consider a change to the education funding formula if it includes measures that make the system more efficient, so more of what we’re currently spending is benefiting our children, rather than funding unnecessary overhead costs and underutilized space.

“The Governor has urged the Legislature not to jeopardize two essential proposals that protect working families and seniors from an increased tax burden by linking them to its proposal for a new income tax.”

Source: Governor's office 3.2.2018