2-27-15 – Bans, Taxes, and Regulations

by Hayden Dublois

In recent years, Vermonters have seen a flurry of laws come out of Montpelier which have hiked tax rates, increased State spending, and imposed new burdensome regulations — all things that make Vermont a less affordable place to live and work. This Legislative session was supposed to be different. After the 2014 elections, we heard countless politicians say that they were “humbled” by the outcome, that they understood our concerns, and that tax relief and fiscal restraint would set the tone for the new biennium. In reality, just the opposite has occurred.

Legislators from all corners of the state are proposing and signing on to new bills which make life even less affordable for low and middle-income Vermonters. In the first month and a half of this new biennium, we’ve seen a surge in three types of all-to-familiar legislation: bans, taxes, and regulations.

First, the bans. H.93 raises the smoking age from 18 to 21, and thereby prohibits any Vermonter under 21 from using or purchasing any tobacco product, substitute or paraphernalia. Apparently, young adults are smart enough to enlist in the military and play a role in deciding who the next leader of the free world will be, but we’re not smart enough to regulate our individual choices. And given our State’s $100+ million budget deficit, I’m surprised that legislators are so eager to sacrifice millions of dollars in existing tobacco revenue by raising the tobacco age. I’m not advocating for young adults to smoke — personally, as a young adult, I detest cigarettes — but I do support the right for individuals to make these decisions themselves.

H.59 bans the sale and use of any flavored liquid nicotine products, yet another assault on the right of individuals to make their own lifestyle decisions. H.244 is certainly a type of ban — that is, it bans you from playing the Vermont State Lottery. This repeal of the state lottery would eliminate some millions of dollars in revenue, which currently goes into the Education Fund. Vermonters would be left to pay for this revenue loss in other ways — like property taxes.

H.260 is a ban in a broad sense of the word: It “bans” employment at certain wage rates by setting the statewide minimum wage rate at $15.00 per hour, starting in 2016. Bear in mind, Vermont’s current minimum wage rate is $9.15 per hour. Increasing the minimum wage rate to $15 per hour amounts to a 64 percent increase. Furthermore, the bill would eliminate the separate wage rate for service/tipped employees. In other words, the minimum wage rate for service/tipped employees — which is currently $4.575 per hour — would increase by a 228 percent. Employers will surely not be able to raise the wages of all of their workers of all of their workers, so they’ll likely be left with one of three choices. One, cut jobs which would have existed at the $9.15 minimum wage rate. Two, cut hours for employees across the board. Or three, pass the costs along to consumers in the form of higher prices. Vermonters can’t afford to absorb all of the costs associated with this legislation.

Next, taxes. Already this biennium, we have seen several proposed tax hikes. Both H.24 and H.235 would impose a brand-new excise tax of 2 cents per ounce on sugar-sweetened beverages. While this tax would certainly impact small-business owners, it would also likely disproportionately hurt low-income Vermonters (because of the lump-sum, regressive nature of the tax).

H.265 is an especially ambitious set of tax increases. It raises the cigarette tax rate by $1.25, bringing the total tax on a pack of cigarettes to $4 — a 45 percent increase. It also raises taxes on smokeless tobacco and snuff by 45 percent, and it raises the floor stock tax on cigarette stamps by 861 percent (from $0.13 to $1.25). Assuming rates in other states are held even, Vermont would rise to number two in the nation for excise taxes on cigarettes. Low-income Vermonters, who are more likely to purchase tobacco products and to be hurt by regressive excise taxes, will bear a substantial new burden. In a similar vein, H.233 proposes to tax e-cigarettes and other vapors at a rate of 92% of their wholesale price. Lastly, for some legislators who are still clinging to the idea of government-run healthcare, H.88 establishes a public health care option, financed not only by premium payments, but also by a 4 percent payroll tax on Vermont employees and an 8 percent payroll tax on employers. While tax season for Vermonters isn’t until April, it has already begun at the State House.

The proposed regulations are far too numerous to delve into, but here is just a sampling of how our legislators have been spending their time: Regulating leaf blowers (H.137), requiring employers to provide paid sick leave (S.15 and H.187), establishing the crime of public intoxication (H.31), requiring warnings on sugar sweetened beverages (H.89), regulating the propane industry (H.126), regulating firearms (S.31), and many others. These are your tax dollars, hard at work.

An article caught my eye today: It pointed out that Vermont’s middle income growth rate between 2009 and 2013 was -5.9 percent (one of the larger declines nationwide), while the wealthiest 20 percent of households saw their incomes increase by 2.8 percent in Vermont over the same period (the sixth largest increase nationwide). Income growth by any class of individuals is not a bad thing, but the figures were indicative of a troubling reality: We’re heading down a path which ends with only the wealthiest Vermonters able to afford to live in our wonderful state. It’s time we get off that path and head in a different direction.

Hayden Dublois writes a bi-weekly op-ed column. He is a resident of Manchester and an Economics student at Middlebury College. Dublois is a political commentator and strategist, as well as a member of the 2013 graduating class of Burr and Burton Academy

{ 4 comments… read them below or add one }

jim bulmer February 28, 2015 at 2:07 pm

Tax, tax, tax, increase fees, increase fees, inctease hidden fees, that’s all the super majority knows what to do. How can folks like this be “humbled”? They’re in and we’re out, so screw you!!!

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Don Boucher February 28, 2015 at 4:48 pm

Excellent letter from a BBA Grad.

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Peg C February 28, 2015 at 11:06 pm

We moved out. Sold everything and left! As the taxes, FEES (can’t call them all taxes-people would revolt, maybe) and regulations to control all who aren’t “connected.”
Yes, I am angry that we were forced out of our home state. At some point when you have a vehicle that keeps nickeling and dimeing you to death…….you sell it and move on. Regrets? Nope not one.

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Jeanne Norris March 5, 2015 at 3:05 am

No wonder these legislators only publish the bs things they are working on If people knew what else is coming, there would certainly be an uproar!! Are these people all wealthy and can afford all this taxing?? I do not agree that the wealthiest should pay and pay either, but come on.. the straw that will break many will be the wage hike increase and the mandatory sick leave.. People are leaving, retiring, if they can and LEAVING this State!! Don’t any of you care???

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