Vermont News Briefs

Vermont 46th in Tax Foundation business tax climate index

Vermont remains among the lowest ranked states in the Tax Foundation’s annual index of business tax climates. The state kept its 2013 position of 46th place, overall.

The Tax Foundation, based in Washington, D.C., analyzes state tax codes across more than 100 variables in five areas: corporate, individual income, sales, property and unemployment insurance taxes. Although Vermont rates very low overall, some of the state’s tax structures are better than others, according to the foundation.

Sales tax took 16th place for transparency and neutrality, while unemployment insurance taxes came in at 17th place. Corporate, individual income and property tax all weighed down the overall score, however, with rankings of 42nd, 44th and 48th, respectively.

Wyoming, South Dakota and Nevada took top honors nationwide. New Hampshire is the year’s best rated New England state, at 7th place. Massachusetts took 24th, followed by Maine at 33rd. Connecticut and Rhode Island scored just above Vermont in 42nd and 45th place, respectively.

Only New Jersey, New York, California and Minnesota scored worse than Vermont, overall.

The Tax Foundation offers its index as a road map for how states can improve their tax  structures with simplicity, and business-friendly systems.

“States are punished for overly complex, burdensome, and economically harmful tax codes but are rewarded for transparent and neutral tax codes that do not distort business decisions,” the press release said.

An analysis of the index in 2013 by GOVERNING Magazine, however, cautioned that the methodology has its flaws. For example, the fact that many taxes share a category but are applied differently in different states means direct comparison is not always accurate.

But the states in the bottom 10 nationwide all “suffer from the same afflictions,” according to the Tax Foundation’s complete 2015 report: complex, non-neutral taxes with comparatively high rates.

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Hilary Niles

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  • Lee Madden

    If you feel compelled to release ideological fluff as news, you ought to explain the source.

    The Tax Foundation is funded by Koch Brothers and major corporations. Its board consists of corporate heads and right-wing political nutters.

    So how useful is their analysis?

  • Franky Boyd

    And that’s any different then the reports regularly highlighted by Public Assets Institute?

    It’s not “ideological fluff” that we have a much higher tax burden in Vermont than other states. It’s a fact.

  • Don Peterson

    What connection is there between ordinary citizens lives and the tax rate on the upper tier of earners?

    Not much I’ll warrant.

    • James Hancock

      There is a huge correlation between the two.

      Just ask the 67% of people in vermont that do not have a job. (i.e. the labor participation rate is only 33% in Vermont, the lowest in the country).

      The people that do have jobs, have crappy ones working at ski resorts and in construction because good jobs don’t come to Vermont because the Hippies have pushed out all of the businesses.

      Vermont is a dying state, and this is why. Soon the federal government isn’t going to be able to shovel Vermont any more money (i.e. Vermont is a net receiver of federal funds while NH is not.) and then Vermont is going to have to pay the piper.

  • Jeff Green

    Double standard as usual, with the lefties. Why don’t you check SHUMLINS DONORS? The son of billionaire George Soros gave money. So did the other billionaire Steyner from CA. The R’s got none. I looked at the previous donations to Phil Scott and Shumlin. 100% of Scotts were from in state – NO BILLIONAIRES.. almost 60% of Shumlins donations before this election, were FROM OUT OF State, millionaires and billionaires, Unions and activist groups.

    The Tax Foundation merely quotes facts. They simply add up the tax burdens and report. Matters not who funds them. So why aren’t you angry that all the D’s and Shumlin depend on Soros money, Tom Steyner billionaire money..unin money, activist money and all majority out of state money. You are just another double standard leftist with blinders on.

  • Jeff Green

    Another thing? Check your facts. Facts are stubborn things. But to progressives, if you repeat a lie often enough, it becomes truth to the disciples.. Just as Clintons wonder boys CArville and Stephanopolous said during their campaign: “Don’t let the facts get in the way of a good sound bite”. That is the main leftist mantra.

    So I checked your facts. I looked at the Tax Foundation site. Yoiu stated it is full of “corporate Heads”. In fact? there are none. See for yourself:

    What you see is a handful of peopke who just work in the tax department at some big companies. There is not a single “corporate head”. NOR is there what I can gather as any “right wing nutters”. I do not see the Koch brothers lieted either. Nor could I find a list of the donations they may have given. but YOU leftists create the false notion sound bites and repeat over and over as truth (but actually are lies), till you all believe. There are no corporate heads on their Board, nor do I see any reconizeable names as the usual “right wing butters”

    But don’t let the facts get in the way of a good sound bite!

  • Doug Hoffer


    Thank you for including a reference to the analysis done by GOVERNING magazine. In addition, I recommend the work of Prof. Peter Fisher in Grading Places: What Do the Business Climate Rankings Really Tell Us?

    The Tax Foundation’s index is reviewed in the book, which (to my knowledge) is the only serious academic review of these types of rankings. See Chapter 5 on page 47. I encourage interested parties to read it. Here is the link.

    Here is the concluding paragraph.

    “There is no point, really, in trying to assess whether the SBTCI successfully predicts which states will do better in attracting business investment, creating jobs, or the like. If it does, it is purely by accident, for the index does not even measure the effect of a state’s tax system on the firm’s cost of doing business, as we have seen with the COST cross-walk. So even if the index appeared to be correlated with growth, one could not conclude, as the Tax Foundation would like, that lower taxes cause growth. The index does not measure tax rates to begin with, or even correlate with relative business tax levels. As a tool for assessing public policy, it is fatally flawed, notwithstanding its carefully groomed appearance of plausibility and academic credentials (however spurious).”

  • Jeff Green

    Hilary, Doug Hoffer is biased, if not bogus. We all know he is biased because he is a number cruncher EMPLOYED by the State! He has to justify his job! So of course he will find a mumbo jumbo academic paper to support his job! All you have to do is look at states with low taxes and regulation and see the difference. Hoffer’s academic exercise could surely be challenged, just like I can show you “academic PHD’s” who prove global warming is real, and I can show you academic PHD work that proves global warming is the biggest fraud in human history. So Hoffer’s showing this academic piece is just fluff and job justification.

    I will show you PROOF, from the State of Vt itself, on what their job projections are. It proves good high paying companies will NOT site in VT because of high taxs and regulations. The jobs forecast (By the STATE themselves) to be crated in VT are LOW PAYING. here is from Vermonts own forecast. THEIR FACTS, not my academic work!

    “The Vermont Department of Labor released its forecast of “high demand” occupations for 2010 to 2020… “High demand” occupations have above-average growth rates or numbers of positions—but not necessarily higher pay. About 69 percent of these new jobs will be in occupations that typically paid less in 2011 than Vermont’s average hourly wage, $20.71. In 2011, 68 percent of Vermonters worked in occupations with lower-than-average wages.”

    SO DOUG? WHY aren’t high paying jobs and companies coming to VT? Can you say, TAXES AND REGULATION??

    Now I will quote for Doug MY research. It is from last year, Forbes review of the States:


    Job Growth (2013): 0.8%
    Cost of Doing Business: 11.9% above nat’l avg
    College Attainment: 35.8%
    Net Migration (2013): -1,100

    See Doug? 2013, job GROWTH a miniscule 0.8%. FACT
    Cost of doing business/ FAR larger here.
    65% residents have no collge degree.
    Net migration/loss of 1,100

    Quoting the low unemployment rate is a bogus SMOKESCREEN to the real facts. here’s more of VT’s ranking in States, by a study:

    “#45 in Business Costs
    #47 in Regulatory Environment
    #45 in Growth Prospects

    Finally, here is how Forbes research summarizes Vermont. All true:

    ““At $26 billion, Vermont has the smallest economy in the U.S. Its unemployment rate of 4.6% is the fifth lowest among states. Vermont suffers from business costs that are 9% above the national average. The state’s job outlook is also weak—projected to be the fifth worst in the U.S. over the next five years. Vermont is the leading producer of maple syrup in the country.”

    Doug, you know the truth. It is in front of you every day here in VT. Quoting academic pieces that can be disputed by other PHD’s, means little. REALITY is in front of you. EVEN YOUR employer, the State o Vermont, sayd 69% of all new jobs in teh next decade will pay less than $20 an hour. Service jobs Doug! Why don’t you ask WHY 69% of ALL VT job growth in the future will be SERVICE type low pay jobs. Can you say “high taxes” and “regulation” keep higher paying companies away? Bernie Sanders and the stranglehold the Conservation Law Foundation has on the permiotting process (over and above the VT ANR), doesn’t help the case for businessses setting up here either. Bernie hates business. CLF hates business. Just ask Stowe Mtn or Lowes.

    • Doug Hoffer

      Your argument (such as it is) would be more persuasive had you actually read Prof. Fisher’s work. I’m sure vtdigger readers would benefit from your critique of his “academic mumbo jumbo” analysis.

      We’re waiting.

    • James Hancock

      And let’s not forget that Vermont doesn’t have a real low unemployment rate. It has a low headline unemployment rate, but also has the LOWEST labor participation rate of any state in the country. That is, if you take into account all those 18-64 that could be working, and then divide the real number of working people (at what they themselves think of as being fully employed) you have 64% of the VT population out of work. They’re just not bothering to look for work, because their freeloading on the socialist government instead because VT pays so well to sit on your A$$ that there is little reason to work for the crappy jobs that they do allow in VT at the golf courses and ski resorts. (Bellows Falls has an 11% labor participation rate and it is by no means unusual in VT.)

      Further even with some of the highest taxes, including all but one province in Canada (Quebec), and they provide healthcare in those tax dollars too, VT STILL requires the federal government to send more money to VT than VT puts in, thus VT is freeloading off of NH directly. (If you ever wondered who’s paying for all of this broadband roll-out in VT, look across the border, because it’s NH paying for it, and getting screwed on it’s own broadband.)

      When the government spigot is shut off because the Federal Government is bankrupt and they can’t hide it any longer, VT is going to be hit hardest by quite a margin. The only thing keeping Vermont afloat at all is the federal government. But soon the socialist/progressive/fascist/communists on the I89 corridor are going to have to take their fingers out of their ears and stop humming to themselves and see reality.

      Any state averaging $18,000 per student to educate in mediocrity has a spending problem not a tax problem, especially considering that Hilltop Montessori in Brattleboro can do a better job, for $11,000 than the $18,000 the state is paying (and that doesn’t include special ed in the $18k btw.) Any state that has an effective total tax rate north of 50% has a spending problem, not a tax problem.

      VT is poised to become a 3rd world (state). NH’s biggest problem pretty soon is going to be setting up border fences and checkpoints along the Connecticut River.

      The hippies that moved to Vermont are getting exactly what they asked for, and the result, as always with socialist magical thinking will be default and ultimately poverty unless they can find someone else to steal from so that they don’t have to face reality a little while longer.

      • Doug Hoffer

        You said, “Any state that has an effective total tax rate north of 50% has a spending problem, not a tax problem.”

        I assume you are referring to Vermont. If so, I would like to see a source for your assertion because I think you are off by a factor of five.

        For example, notwithstanding a comparatively high top marginal rate (8.95%), the EFFECTIVE income tax rate for the top 1% is actually about 6%.

        In addition, the other major state and local taxes combine for less than 3% of income, which totals less than 10% rather than 50% as you claimed.

  • If you’re a small business that operates as an S-corp, you would be better off tax-wise in Vermont than New Hampshire, which the foundation loves. Let other states pander to big business and keep them from coming to Vermont to rip apart and pollute the beautiful state. Vermont residents rate their state among the best in the US according to a Gallup poll, and others have ranked it as a great place to live. What’s more important, that people love to live and vacation in Vermont, or attracting corporate conglomerates who are only concerned with what they can extract from the state for profits sake?