Bill would raise taxes on richBy Peter Hirshfeld
Published February 11th 2012 in The Times Argus
“Paying more in taxes is not a realistic option for a great many Vermonters,” Pearson said. “But just because most of us haven’t seen a boom doesn’t mean the picture is bleak for everyone.”
The bill targets a narrow band of high-earning Vermonters and would raise about $17 million to button up homes and save money on winter heating.
Rep. Chris Pearson, a Burlington Progressive and lead sponsor of the bill, says the proposal takes money from people who can spare it to assist families that could use it.
“Even in this mild winter, Vermonters are stretching to keep up with heating bills,” Pearson said. “While more and more the idea of saving money through energy efficiency is gaining acceptance, Vermonters by and large don’t have the disposable income to invest in insulation.”
Gov. Peter Shumlin said he supports Pearson’s plan for an “all-fuels” efficiency program, which would expand upon existing initiatives aimed at reducing electricity usage. But he dismissed the funding mechanism, reiterating his opposition to tax increases.
Pearson, joined by a handful of Democratic and Progressive lawmakers at a Statehouse news conference, said the rich can afford to pay more.
On a triptych set up in the Cedar Creek Room, Pearson exhibited graphs detailing a widening income gap in recent years. Between 2003 and 2010, according to data from the Vermont Department of Taxes, Vermonters earning between $30,000 and $50,000 saw income grow by about 2 percent; Vermonters earning less than $30,000 had a decrease in earnings.
During the same period, Vermonters making more than $200,000 saw income growth, on average, of greater than 60 percent.
“Paying more in taxes is not a realistic option for a great many Vermonters,” Pearson said. “But just because most of us haven’t seen a boom doesn’t mean the picture is bleak for everyone.”
Pearson’s plan targets the relatively small number of Vermonters making more than $209,000 per year. The proposal wouldn’t affect the top marginal income tax rates paid by rich Vermonters, but instead requires them to pay the same top rate on every dollar earned.
Currently, someone making $209,000 — enough to land in the second-highest tax bracket — pays 3.55 percent on the first $57,000, 6.8 percent on the next $80,000 and so on, until arriving at the 8.8 percent rate for that bracket.
The Pearson plan would impose the 8.8 percent rate on all earnings for that bracket.
“We are asking those few Vermonters who have enjoyed the boom to pay a little more,” Pearson said.
For the 2,595 Vermonters whose income lands them in the second-highest tax bracket, the proposal would raise tax bills by an average of $2,800. For the 1,331 residents in the top bracket — $373,000 and over — the legislation would mean an average of another $4,750 annually.
Pearson said the relatively small number of individuals affected by the plan is “in keeping with the governor’s desire to leave broad-based taxes alone.”
Pearson, whose bill has 10 co-sponsors, spearheaded unsuccessful attempts to raise revenues last year.
[Source]
