Vermont Better Start Cutting Taxes/Spending Dramatically

by Rob Roper

The Wall Street Journal recently looked at IRS data and noticed “an accelerating flight from high-tax states.” The editors conclude, “The liberal tax model is to fleece the rich to finance spending on entitlements and government programs that invariably grow faster than the economy and revenues. IRS data on tax migration show this model is now breaking down in progressive states as the affluent run for cover and the middle class is left paying the bills.” Though the editorial focused on larger states, such as Illinois, New Jersey and Connecticut, Vermont lawmakers should take warning. This is you.

It used to be that the people moving into Vermont brought in more revenue than what was lost when others moved out. However, this has not been the case for several years. Writing a year ago about 2013/14 Census statistics, UVM economist Art Woolf noted that among taxpayers earning over $75,000, the income group that provides the majority of Vermont’s revenue, “people moving out took with them $78 million more in income than people moving in earned.  That is, middle and high income people moving out of Vermont tend to be richer than people moving in.” (BFP, 9/15/16)

What’s worrisome is that this was occurring before the US Senate joined the House in passing a federal tax reform bill that will in all likelihood lead to the elimination of the state and local tax (SALT) deductions on the federal income tax. This will mean a big hit for taxpayers in high tax states like Vermont, increasing quickly and dramatically the incentives for people with already high tax bills to flee.

Vermont’s tax and spend business model was failing already. Federal tax reform, assuming that it passes, will be the final fatal nail in that coffin. Our lawmakers’ challenge is to implement a new business model that conforms to both the old and the new economic realities and makes our state economically competitive on a national and global scale. The status quo is no longer an option.

Rob Roper is president of the Ethan Allen Institute.

{ 7 comments… read them below or add one }

John Mahaffy December 6, 2017 at 9:53 pm

Our legislators and those who continue to vote for ’em aren’t able to see what’s obvious to the rest of us: the folks moving out can AFFORD to move . . . and they’ll continue the exodus so long as Montpelier imagines it’s sensible to try to squeeze blood out of a turnip.

Reply

Duane Partlow December 7, 2017 at 3:49 pm

I was born in Vermont but cant figure out why people stay there, the people are run by politicians who mostly werent even born there, whose theories of deficit spending and liberal management are completely out of control. What they need running that state is some farmers with a good business sense and not a bunch of freeloading educated professional politicians, who promote laziness and handouts for votes. I love to visit back home but certainly couldnt afford to retire there, at least in Texas they take care of their elderly who are on fixed incomes unlike Vermont, a state that cant wait to swoop in and take whatever they can out of your pocket. Who needs government like that?

Reply

Robert December 8, 2017 at 10:19 pm

Well stated. The prevailing attitude amongst the Vermont liberal elite intelligentsia Legislative majority is that Vermonters’ money is their money, and that we work for them, not the other way around. Each session they breathlessly enumerate their far-left agenda items and then behave in a manner that would imply they were begged to take up these nutty causes. And of course the “gimmedats” will go along with anything that might result in freebies to them. A few of their recent brainchilds include Universal Pre-K (aka daycare on someone else’s dime), gun control (aka making crime safer for criminals), marijuana legalization (aka getting people stoned into paying more taxes) and a carbon tax (aka save the planet by sending your money to Montpelier). It reads like the far-left manifesto because that is exactly what it is.

Reply

William Hays December 8, 2017 at 10:35 pm

Unfortunately, “Liberal-Elite-Intelligentsia” is better described as “Socialist-Communist-Progressives”. Progressive Cultural Marxism, as Pat Condell calls it.

Reply

Steve Hearne December 9, 2017 at 5:00 am

A little off subject but how about the new and very expensive vehicle inspections? I am not sure when exactly we became the most eastern county of California but why do we have California emission standards? Why do we have to pay $60.00 for each of our vehicles to have someone tell us our lights work? This can only be to justify someones job behind a desk in Montpelier. The legislature patted them selves on the back for not increasing taxes last year but gave us this regulatory burden that hits low income working Vermonters especially hard.

Reply

H. Brooke Paige December 9, 2017 at 7:12 am

The Liberal Legislature fails to understand what any Vermont farmer has known since childhood – you only can skin a sheep once ! Everyone I know, who is able to move out of Vermont, is either attempting to leave now Or planning to do so as soon as they reach retirement age ! In time there will be two groups left, the rich (Including trust fund kids) who are so rich that they could care less about taxes or have a team of lawyers and accountants to keep them from having to pay significant taxes AND the poor who could care less about taxes because they don’t have to pay them ! The first group will need the second group to serve as their hourly wage slaves !

Reply

linde emerson December 10, 2017 at 12:29 pm

if gov scott would legalize marijuana,we could get some people back that have been fleeing to MA and ME

Reply

Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
Read more...

Latest News

EAI Comments on Individual Mandate Working Group draft report

  October 11, 2018 Herewith are our comments on the Working Group’s draft product. The legislature is concerned that with the repeal of the Obamacare insurance mandate, individual...

High Minimum Wages Were Designed to Hurt Minorities

October 5, 2018 by Rob Roper With institutional racism becoming an increasingly discussed topic in Vermont, it is ironic that some of our legislators are again promising to...

Bernie, Amazon, and How a $15 Minimum Wage Screws the Little Guy

September 4, 2018 by Rob Roper Amazon just announced that it will be implementing a $15 minimum wage for all of its North American employees. Bernie Sanders is...

The $15 Minimum Wage Will Be Bad for Young Families

October 3, 2018 by Rob Roper Gubernatorial candidate Christine Hallquist and Democratic leaders promised to revive and, if they win the additional seats they need in the house...

Retirement Funds Liability

September 27, 2018 by John McClaughry Before long the State Treasurer will receive the 2018 report of the auditors of the state’s two retirement funds – the state...

Video