July 31, 2019

by Rob Roper

Yesterday I wrote about progressive Seven Days reporter Taylor Dobbs’ decision to leave Vermont for “red” North Carolina for reasons of affordability. In doing so, I cited several things that North Carolina has done over the past decade – dramatic tax cuts and regulatory reform — that has made its economy such an attractive place for young professionals such as Dobbs, a journalist, and his wife, an educator.

Since the struggle to keep young people in Vermont is a front burner issue these days, and one for which our legislators are desperately seeking solutions (our state bond rating was recently lowered due to demographic/workforce concerns), it is also worth noting some of the things North Carolina has NOT done over the past decade.

For example, North Carolina does not have a $15 minimum wage. In fact, North Carolina’s minimum wage is the lowest allowable by federal law: $7.25 an hour.

Also, North Carolina does not have a public, universal preschool program. They do have a state-run pre-k program for qualified low income and at-risk kids, but it is not open to everybody.

And, North Carolina does not have a Paid Family Leave program. Though the NC state House did consider a leave program in 2019, it was not taken up by the senate.

These are all policies Vermont politicians have touted as initiatives Vermont has already adopted, wants to adopt, or says we should expand in order to attract and keep young professionals in our state. We have had universal pre-k since 2007 and are debating expanding the number of hours offered per week. We already have one of the highest state minimum wages in the nation and are debating an even higher one, and Paid Family Leave will be back on the agenda come January.

Well, none of these things kept Dobbs and his wife here in Vermont, nor did their complete absence in North Carolina deter the couple from choosing to move there. The policies were clearly non-factors in deciding where to live and work. So, maybe we in Vermont should consider the possibility that these very expensive propositions are not the answers we are seeking, and will not be effective if adopted.

Rob Roper is president of the Ethan Allen Institute. 

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July 30, 2019

by Rob Roper

Vermont’s leading progressive news publication, Seven Days, reported that one of their award-winning young journalists, Taylor Dobbs, “is moving to North Carolina with his wife, Tori, after years of trying to make it financially in Vermont.” Oh, the irony here…. And perhaps a teachable moment.

It’s safe to say Dobbs’ political proclivities incline toward the Left, and he embraces the Seven Days progressive culture. The paper and its writers have done their best to advance a progressive agenda for Vermont, and, credit where it’s due, have succeeded mightily. Democrats hold supermajorities in both chambers of the legislature, all the statewide offices except governor, and Progressives rule the roost in Burlington where Seven Days is based. In fact, Dobbs and his colleagues have been so successful that young professionals like himself and his wife can no longer afford to live here and pursue a meaningful career. Good job!

But here’s the real kicker. Where is Dobbs going to flee these oppressive Progressive policies he helped advance to find greater opportunity and a sane cost of living? North Carolina. What’s so attractive about North Carolina? Here’s a summary of the Tar Heel State’s recent political and policy history over the past decade.

Republicans took control of North Carolina’s legislature in 2010 for the first time in 140 years. Two years later, they established supermajorities in both chambers and elected a Republican Governor, Pat McCrory. These Republicans then enacted a dramatic package of tax and regulatory reform. Here’s a summary of what they passed in 2013 (Source, ATR).

Individual Income Tax

  • Flatten and lower rate from 7.75 percent, the highest in the South, to a 5.75 percent by 2015;
  • Increase standard deduction to $7,500 (for singles);
  • Allow full deductibility of charitable contributions;
  • Fully exempt Social Security income from state income tax;
  • Allow for certain itemized deductions (total of mortgage interest and property taxes paid would be capped at $20k); and
  • Retain current child credit of $100 for those earning $40k and increase credit to $125 for those earning under $40k.

Corporate Income Tax

  • Reduce rate from 6.9 percent to 5 percent by 2015;
  • If certain revenue targets are met, rate would decrease to 4 percent in 2016 and 3 percent in 2017.

Other Changes

  • Retain full sales tax refund for nonprofits;
  • Cap gasoline tax; and
  • Fully repeal estate tax

These reforms, and those that followed, have led to what has been described as an “economic miracle”.

A recent study measuring six areas of economic growth (growth in real (inflation-adjusted) GDP, employment, real GDP per capita, real personal income per capita, employment per capita, and worker productivity), showed that between 2014-17, the period after the NCGOP tax cuts and economic reforms kicked in, North Carolina’s economy outperformed the nation and the Southeast in all six categories. Vermont policy makers would do well to take note.

North Carolina is doing so well that a progressive journalist from Montpelier is moving his family there – and out of Bernie’s Vermont — for a better life. Good luck, Taylor. Don’t screw up your adopted state like you did your home state!

Rob Roper is president of the Ethan Allen Institute.

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By David Flemming

The Tax Foundation came out with a fascinating study comparing how the 50 states ranked in regards to tax burden. I would have guessed Vermont would come in the top 10, after all that is “what we have become.” We did even worse than making the top 10 however. We ranked highest in the country for “state tax collection per capita in 2017.” That’s right, on a per capita basis, we each paid $5,015 to our Vermont government in 2017, more than any other state!

Now some skeptics might say, “but doesn’t Vermont’s state government pick up the tab for public schooling more than most other states, which fund public schools through local taxes?” And yes, there may be some truth to that. While you would need to compare 2016 to 2017, Vermont falls all the way to 10th (how great!) most burdened if you factor in state and local taxes. We only paid $5,904 taxes per capita in 2016.

Places like New York collected fewer taxes per capita at the state level: $1001 less than Vermont in 2017. They also collected more than $3000 per capita in taxes in 2016 than Vermont did, considering state and local taxes. I’m sure that is in large part due to New York City’s local taxes. But Vermont doesn’t have its own vast economic behemoth- Burlington is less than a hundredth the size of New York City.

Vermont really can’t do much worse on its tax burden ranking- in terms of changes to our relative tax burdens, we have nowhere to go but up. In terms of absolute tax burden however: we could indeed end up spending even more to cover our pension liabilities and renovated education system. As Rob mentioned last week, a taxpayer bill of rights could help restrain tax increase a good deal. We must also discipline ourselves to spend less on non-essential government services.

David Flemming is a policy analyst at the Ethan Allen Instiute

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July 26, 2019

by Rob Roper

So, the numbers are in and Vermont ended its fiscal year with nearly a $60 million revenue surplus. ($58.4 million to be exact, or 4.5% above forecasts.) This is largely thanks to an extra $43.5 million in personal income tax collections and $38 million in corporate income taxes.

Sixty million in a state of 620,000 is not a small amount of cash. It’s a little less than $100 for every Vermont man, woman and child (roughly speaking, $400 for a family of four). Think of this as the amount the state government overcharged you in the 2019 fiscal year for services provided.

In a just world, or in the private sector, when the customer gives the service provider more than necessary to meet the contract – handing over a $10 bill to pay for an $8 sandwich, for example –the provider gives the customer back the surplus amount in change.

But this is government. “Progressive” government. So, they’re gonna just keep that money because they are smarter than you and can find better uses for it. This is your money. If a private company operated this way, Vermont’s Attorney General would be first in line bringing a lawsuit for unfair or fraudulent business practices.

This is why Vermont needs a Taxpayer Bill of Rights (TABOR). TABOR basically states that any revenue raised beyond what was required to meet the fiscal year’s budgeted obligations must be returned to the taxpayers. Period. End of discussion.

Colorado passed a TABOR in 1992, and it has been at the heart of that state’s long-running economic success. The Denver Post explains their law:

  • Limits how many tax dollars governments can keep using a formula that adjusts each year based on population and inflation. It’s called the TABOR cap, and anything a government collects above the cap gets returned as a TABOR tax refund.
  • Limits when lawmakers can ask voters to raise taxes. They can’t use special elections and only questions related to TABOR or taxes can be on the ballot in odd-numbered years.
  • Requires those asking for a tax hike to put the total amount they expect to collect first in the ballot language and then explain how that money would be used.
  • Prohibits charging certain Coloradans more in taxes than others — as the federal government does with its income brackets.
  • Bans raising certain kinds of taxes, like one on real estate transfers.

It would be nice if Vermont had something similar, wouldn’t it. You’d be looking forward to a $100 rebate check in the mail instead of feeling ripped off.

Rob Roper is president of the Ethan Allen Institute

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July 26, 2019

By John J. Metzler

Bondville, VT—For those of us of a certain age, we vividly remember where we were on July 20, 1969 the date of America’s successful Lunar landing.  On a cool July southern Vermont evening my parents and I visited friends to watch what was expected to be a live transmission from the Moon!  So on a flickering black and white TV, they were able to pull in WBZ from Boston, and receive what even then we knew would be history.

America’s iconic space program was steeped in lore and legend but actually in the beginning  had more to do with keeping up with the Soviets than actually exploring the huge frontiers of Outer Space.

We all know the story; the Soviets launched the Sputnik satellite which jolted American complacency and concentrated our attention on what later would be called the space race.  By 1961, the Soviets had sent a man into space.  In 1962 President John F. Kennedy pledged, “We choose to go to the Moon!”

Actually his impulse was more political than scientific.  A conversation, released by the John F. Kennedy Presidential Library reveals his true motivation to beat the Soviet Union; “In my opinion, to do it in this time or fashion, is because we hope to beat them,” he said, “and demonstrate that starting behind, as we did by a couple years, by God, we passed them.”

NASA became THE cutting edge and popular government agency if there ever was one.  A whole generation was inspired by its vision the daring, and the human and technological achievements of the Space Program.  Over 400,000 people worked in the program and NASA had an unquestioned budget of $25 billion, ( $175 billion in today’s numbers!)

Think about it; from never having had an astronaut fly in outer space until 1961, a scientific program fast tracked an extraordinary mobilization which by 1969 operated multi-manned missions on the cusp of reaching and landing on the Moon.

For NASA, getting a man to the Moon was part of a long, arduous and dangerous series of space missions.  In May 1961, Alan Shepherd, from New Hampshire, became the first American in Space.  He was followed by John Glenn’s Mercury Mission in 1962 where he became the first man to orbit the earth.

The storied Apollo Missions were the stepping stones.  The first step was a disaster; the terrible 1967 Apollo 1 launch pad ground accident which saw the deaths of  three astronauts.  Two lunar orbit and return missions preceded the Apollo 11 landing mission.

Part of the challenge was getting Astronauts to the Moon but also back safely.

Three astronauts were chosen for the Apollo Lunar 11 mission; Buzz Aldrin, Neil Armstrong and Michael Collins.

Interestingly and easily forgotten was Apollo 12,  just months later in November of 1969 where astronauts again landed on the Lunar surface, this time in the Ocean of Storms region.

Then there was Apollo 13, the aborted and nearly disastrous mission in April 1970 and the subject of a thrilling movie.  All told Apollo carried out four more successful landing missions until December 1972.

Over that period 12 American astronauts landed and walked on the Moon. The Apollo program had amazing ground support teams coordinated by NASA Flight Director Gene Krantz.

The Moon landing was the highpoint of a tumultuous summer where domestic discord over the Vietnam war tore apart the nation’s fabric.  Casualties were mounting, the anti-war movement was seething, and the so-called Woodstock generation partied while American kids from Brooklyn, Biloxi and Baltimore were fighting and dying in the Mekong Delta.

So where do we go from here? Back to the Moon! During the Obama Administration, NASA suffered from neglect of manned space flight programs and actually outsourced some launches to Russia!   Addressing the National Space Council, Vice President Mike Pence affirmed it’s now official  policy to return American astronauts to the Moon by 2024, thus putting the U.S. back in the game.

Late that Sunday evening and amid lots of static and waiting which seemed forever before the astronauts left the Lunar capsule, there was the Main Event.  Leaving the capsule, with the immortal words “This is One small step for Man, and One Giant Leap for Mankind,”  Neil Armstrong and Buzz Aldrin were walking on the Moon!

Armstrong placed the American flag on the Lunar surface in what known as the Sea of Tranquility.  A few people in our group, among then two New York City school Principals, proudly pointed at the little TV set and kept saying “That’s our Flag, That’s an American flag!”   We walked home under the starry Vermont sky, and yes, winked at the Moon.

 

***************

 

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues.  He is the author of Divided Dynamism The Diplomacy of Separated Nations: Germany, Korea, China.

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July 25, 2019

By John McClaughry

Simon Bennett (in green skirt) reads Extinction Rebellion climate change demands Tuesday morning on State Street in Montpelier while lines of cars, unable to turn onto State Street, idle at a nearby stop light.

First a climate mob interrupted the workings of the Vermont House. Then another bunch of climate protestors stopped the Strolling of the Heifers Parade in Brattleboro. Last week they struck again – not the same individuals, but the same climate-intoxicated friends of civil disobedience. They won’t be satisfied until, well what? The climate stops changing?

This last protest took place all morning long last Tuesday, on an intersection on State Street in downtown Montpelier. The “Extinction Rebellion” climate change mob stopped traffic all along State Street. This mob demanded “immediate, overwhelming government response to the climate emergency”…saying “we do not trust our government… we demand a Citizen’s Assembly to oversee the changes as we rise from the wreckage, creating a democracy fit for purpose.”

Eyewitness Guy Page, who publishes State House Headliner report, observed that the protest got the attention of both Montpelier and Vermont State police, all of whom told him that the protesters were in violation of their permit because they were blocking traffic. There were, of course, no arrests.

Maybe it’s time for ordinary Vermonters to make demands. Try this: “we demand that climate change civil disobedience protestors be arrested, booked, put before a judge, and if convicted sent off to a rustic camp up in Essex County without their cell phones to plant carbon dioxide-sucking trees for a week or two.”

That sounds reasonable, but it won’t happen, because weak kneed prosecutors will let them off.

John McClaughry is vice president of the Ethan Allen Institute.

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July 22, 2019

by John McClaughry

Last Saturday the news media widely proclaimed the “hottest day on record”, although they never explain just what record they’re referring to.  They invariably warn us that the hot day is a result of “climate change”, which is a description, not a cause of anything.

I went on line to see if that was the hottest day on record in Vermont. First, if you Google Vermont hottest temperature you’ll get page after page of news media reports, but you are very unlikely to find the actual data. This is herd journalism by press release. Ignore it.

I finally found the National Climate Data Center, which keeps track of these things. Here are the facts, as distinguished from ignorant headlines blaming the hot day on greenhouse gas emissions.

The hottest day on record in Vermont in the past 150 years was 105 degrees. That came on the Fourth of July 1911, and could not have been the result of greenhouse gas emissions.

Here are some other hottest days: Arkansas, 100 on June 27, 1915. South Carolina 113 on June 30, 1912. Colorado 118 on July 11, 1888.

The most recent record in any of the United States was reached in South Dakota: 120 on July 15, 2006.

Don’t fall for that “hottest day on record” crap. Look it up.

John McClaughry is vice president of the Ethan Allen Institute. 

 

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July 19, 2019

by John McClaughry

Last Wednesday Bernie Sanders unveiled his latest version of “Medicare for All,” his scheme for single-payer health care. He estimated it could cost up to $40 trillion over 10 years, which blows past the $32 trillion estimate outsiders calculated after Sanders first began peddling his plan. Previously, Sanders admitted that he would raise taxes across the board to pay for this government power grab, but now that he’s upped the price he’s downplaying that broad tax increase and focusing on the rich paying more.

As Mark Alexander of Patriot Post observes, “This massive sum of $40 trillion only exposes Sanders’s

apparent ignorance of basic economics. “Forty trillion over ten years is an average of four trillion per year. Does anyone recall what the entire budget of the United States federal government was for 2018? It was 4.094 trillion dollars. So Sanders is casually talking about expending the equivalent of our entire budget on his health care plan.” At the same time he’ll outlaw (private health insurance and wipe out that entire industry.”

Nevertheless, Sanders insists that his plan is not “absurd,” asserting, “What the most serious economists tell us [is] that if we do nothing to fundamentally change the health care system, which is what Joe [Biden] was talking about, keeping it as it is, we’ll be spending something like $50 trillion over a 10-year period.”

This sugars off to the typical socialist promise “health care, no matter what the cost.”

John McClaughry is vice-president of the Ethan Allen Institute

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July 18, 2019

By Rob Roper

Newly minted gubernatorial candidate Rebecca Holcombe in her announcement press conference stated that one reason she left her position as Education Secretary was Governor Scott’s determination to institute “a statewide voucher plan that would pull millions out of our public schools … and give that money to private schools that mostly benefit privileged Vermonters.” (Seven Days)

Firstly, would it were true that Scott had had actually proposed and promoted a statewide voucher system, but he hasn’t. So, there’s that bit of weirdness to the claim.

But, regarding the policy directly, here are some thoughts to consider regarding Holcombe’s statement:

In Vermont, the students in ninety or so towns who are lucky enough to have school choice under our 150 year old tuitioning policy get to pick from both public and independent schools. Why does the former Secretary of Education think that if, given a choice, parents representing “millions of dollars” will pull out of the public schools and choose Independents? Does the chef know something about what’s in the stew here?

Also, under the current system, where kids are forced to attend the public school they are assigned within imaginary district lines, the wealthy truly are the privileged class with multiple options. If the local school doesn’t work, the wealthy can afford buy their way out of the system by paying tuition to an independent school regardless of access to a voucher. The wealthy are more likely to have the flexibility, financial and otherwise, to choose to live either in a district with the best public schools (usually more expensive for real estate and property taxes), or, having their cake and eating it too, to move to a tuitioning town to get the subsidy for an independent school or the ability to pick the public school of their choice.

It’s the poor kids who are stuck. And if the school they’re stuck in doesn’t happen to be the right fit, that can be an educational death sentence.

Vouchers and school choice bring more equity to publicly funded education. They give the poor an opportunity much more equal to their wealthier counterparts in terms of the ability to find and benefit from an educational environment that is right for them. It gives them economic and political leverage within the public school system to make demands for better service (or we’ll leave along with our money) that currently only wealthier parents can exert.

To support school choice with tuition following the child is to support greater educational, financial, and social equity. Opposing it is to support a monopoly that exploits the poor and, if you look at the disparity in outcomes between income classes, is failing them miserably in the process.

Rob Roper is president of the Ethan Allen Institute.

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July 17, 2019

By Shayne Spence

Much hubbub has been made on the Democratic presidential campaign trail about tech giant Amazon, and their now-infamous ability to pay $0 in federal income taxes some years.  Candidates like Bernie Sanders and Elizabeth Warren have targeted the online retailer for years, charging that their low tax liability is akin to the federal government subsidizing their business model.  Ignoring Amazon’s hundreds of billions paid in taxes to state and local governments, their rising wages, and the fact that Sanders himself gets away with paying a very low tax rate considering his millionaire status

Amazon’s Prime Day was this week, a misnomer, since this year the sales will span two full days.  And while Amazon workers in several cities were busy striking against their employer, Amazon itself was doing a barely-noticed service to the American taxpayer, by essentially paying all of their sales taxes on large transactions, plus some.

Let me explain.  First, it’s important to remember that just a few years ago, Amazon was in a bit of a no-man’s land when it came to sales tax. Some states explicitly required Amazon to collect and remit sales taxes to them, while others had not set policy to deal with this shift in the Internet age.  Because of this, Amazon, for the most part, did not have to charge sales tax for sales made through its website, giving it a massive advantage over brick-and-mortar shops in high tax areas, like, say, Vermont.

However, a recent Supreme Court decision, South Dakota v. Wayfair, made explicit each state’s ability to charge sales tax on all purchases made by citizens within that state.  Since that decision in 2018, 31 states have updated their sales tax statutes to include interstate online sales.  Amazon, as a result, has started to collect and remit sales taxes to those states.

Which brings me to now.  On Prime Day this year, I decided to take advantage of the huge savings on certain big-ticket items.  I’ve needed to buy a new PC for a while, to take my design business to the next level, as well as unlocking some more frames per second when I’m gaming.So this year I decided to splurge and get that new PC, a liquid-cooled CYBERPOWER gaming PC with a top of the line graphics processor.  (For those who know what that means, I was drooling too.)  But these machines do not come cheap. The list price of this new PC is $1,849.  Luckily I’ve been saving my pennies for a while, and held on to most of my tax refund check, so I figured the time was right to bite the bullet and make the purchase.

Some of you are probably wondering, “How did Amazon pay your taxes, silly millennial nerd?”  I’m getting to that. The savings Amazon was offering on this crazy-expensive piece of equipment were $350, for Prime members.  I paid my membership fee forever ago, so that $10 monthly was well out of my mind when I made this purchase. But I was thinking to myself, “Holy cow! $350 is enough for at least 5 Starbucks coffees!”

Screen Shot 2019-07-16 at 10.39.57 AM-1.png

But the real shock came when I took a look at the final receipt, which you can check out below.

You can see the free shipping, which is one of the fundamental perks of a Prime membership.  You can see “Deal of the Day”, a $350 (or 18%) rebate. But down a little further, you can see “tax to be collected”, at $89.94.

Now, I don’t shop on Amazon often, I much prefer to pay a little bit extra to support a local business and have a face to face conversation with an actual human.  For me, my Prime subscription is made worth it through all of the various add-ons, not necessarily the two day shipping or other sales. But, it would appear to me that on Prime Day, at the very least, Amazon has found a way to not only bring customers like me into the “store” for the day, but they’re also willing to eat the added costs that state governments have been imposing on consumers ever since the Wayfair decision.

All of this may have just sounded like a #paid Amazon advertisement (if any execs are reading this, contact me for my PayPal) but I see it as a firm rebuke of the philosophy of the Sanders/Warren left.  They, and others of their cohort, have made Amazon out to be a greedy, evil corporation, devoid of any sort of human compassion. They’ve ceaselessly attacked Amazon, instigated labor disputes at Amazon facilities, and chased future Amazon development out of their cities.  Amazon, for its part, has increased wages, increased benefit packages, improved working conditions and more.

And now they’re willing to go the extra mile for their customers, by making sure that the first Prime Day since the new sales tax laws went into effect, those customers would not have to pay any additional taxes on Prime Day sales items.  It’s this kind of creativity and, honestly, generosity on the part of private actors that make it so the free market will always be better than government.

Shayne Spence is a former Legislative Coordinator for the Ethan Allen Institute. He now lives in Johnson with his partner Athena and their two cats.

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