IN FRIDAY’S FINAL READING…
Vermont’s Tax Structure Commission has recommended expanding the state’s sales tax and funding its education system with an income tax, rather than the existing education property tax.
A report issued this week by the commission argues — as many have before — that income is a better proxy for one’s wealth than the value of one’s home.
The recommendation to move from property to income tax mirrors proposals that Progressive elder statesman Sen. Anthony Pollina, P/D-Washington, has repeatedly introduced during his time at the Statehouse. Such proposals have historically been met with a cold shoulder from fellow legislators.
“I put these bills in, and … sometimes you get to present it to the Finance Committee, and then the Finance Committee says, ‘OK, thank you very much,’ and moves on to something else, because they think it’s too complicated or too controversial to do,” he told VTDigger.
“I think this report is going to make it more clear that it’s mainstream thinking,” he added.
The report also recommends expanding Vermont’s sales tax to nearly all consumer goods and services. It found that the state has one of the smallest sales tax bases in the country.
The report raises the possibility of taxing items such as groceries, and services such as higher education, construction and landscaping. Broadening the base could reduce the overall sales tax rate from 6% to 3.6%.
Bram Kleppner, one of three commissioners who wrote the report, told the House Ways and Means Committee on Friday that broadening the sales tax base would make the state’s revenue system more stable during times of economic change.
“The broader the base, the more likely things going up and down over the next 20 years as everything changes will balance each other out and we’ll be in a more stable situation,” Kleppner said.
Whether the Tax Structure Commission’s recommendations are enough to sway the Democratic Legislature to tackle tax reform is another question entirely — particularly in a year in which Covid-19 and an economic crisis have sucked up most of the legislative oxygen.
And even if Democrats came around to the idea, it would also require the support of Republican Gov. Phil Scott, who has rarely found a tax or fee he supports.
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