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Coalition launches push to raise taxes on Vermont's highest earners

About a dozen people standing behind a podium holding green signs
Peter Hirschfeld
Vermont Public
Anika Heilweil, manager for the "Fund Vermont's Future" campaign, said state government won't be able to meet the needs of its residents unless it pulls more revenue from its highest earners.

A new coalition that wants to increase taxes on Vermont’s highest earners is calling on lawmakers to pass legislation next year that it says will generate close to $100 million in state revenue annually.

Organizations including the Vermont-NEA, the Vermont chapter of the ACLU and the Vermont Natural Resources Council held a press conference in Montpelier Thursday to launch the “Fund Vermont’s Future” campaign.

They say a 3% surcharge on incomes over $500,000 would raise the money Vermont needs to build affordable housing, improve access to health care, repair deteriorating infrastructure and gird against the impacts of climate change.

“The reason we are here today is simple,” said Anika Heilweil, with the Public Assets Institute, which is also part of the coalition. “It is time for the wealthiest Vermont residents to pay their fair share so we can build a Vermont that works for everyone who lives here.”

“I’m not sure how many more of the wealthy there are, and how much more we’re going to reap from them without them moving.”
Gov. Phil Scott

Don Tinney, president of the Vermont teachers’ union, said decades of state and federal tax policy have contributed to the rise in economic inequality by abetting the accumulation of wealth. The coalition’s so-called “Fair Share for Vermont” proposal, he said, will help distribute resources more equitably.

“Vermont’s wealthiest already have access to everything they need,” Tinney said. “Fair Share for Vermont merely asks the state’s richest folks to pay their fair share in taxes so that we can build a Vermont that works for all of us.”

The campaign has already begun to make inroads with key legislators. In an interview with Vermont Public on Thursday, Brattleboro Rep. Emilie Kornheiser, the Democratic chair of the House Committee on Ways and Means, promised a “robust conversation” about the proposal during the 2024 legislative session.

“I’m in this work because I want to build a Vermont that works for everyone,” Kornheiser said. “And I think one of the really key pieces of that is a tax policy that ensures that everyone is paying their fair share.”

 A woman in a white blazer stands at a microphone and reads from a phone
Lia Chien
Vermont Public
Rep. Emilie Kornheiser, a Democrat from Brattleboro, speaks during discussions at the House of Representatives on June 20.

The correlation between income and wealth is imperfect, according to some economic research. And Kornheiser said the Legislature will have to make sure it tailors policy accordingly.

“I know that we need to understand where the lines are between wealth and income, and making sure that we’re targeting our policies as best we can,” she said.

Gov. Phil Scott has vowed to reject any legislation in Montpelier next year that includes an increase in taxes or fees. Asked about the Fair Share for Vermont proposal at his weekly media briefing on Wednesday, Scott said the initiative is misguided.

“We have a pretty progressive tax policy here in the state already,” Scott said. “I’m not sure how many more of the wealthy there are, and how much more we’re going to reap from them without them moving.”

“Wealth inequality ... reinforces the many forms of systemic racism that we work to dismantle each and every day.”
James Duff Lyall, Vermont ACLU

Heilweil said data analyzed by the Public Assets Institute shows that 2% of income tax filers report earning of more than $500,000 annually.

Numerous studies have pushed back against the claim that raising taxes on high earners will result in flight to lower-tax states. A 2011 report by the Vermont Blue Ribbon Tax Commission also found little evidence of flight due to income tax rates on high earners.

“There’s so much research at this point that that’s just not true,” Kornheiser said of Scott’s tax flight concerns. “People move to Vermont because they want to live in a place of natural beauty. They want to live in communities where people care for each other and show up for each other and where government functions well. And Vermonters paying their fair share in order to create those communities is exactly at the heart of why people move here.”

States such as Washington and Massachusetts have assessed surcharges of as much as 4% on their highest earners in recent years. Members of the coalition said it’s time for Vermont to do the same.

James Duff Lyall, executive director of the Vermont chapter of the ACLU, said economic inequality has denied many Vermonters access to basic necessities.

“As a result, many are prevented from exercising their civil rights and civil liberties to the fullest extent, participating in our democracy and experiencing true freedom and equality in our society,” he said. “Wealth inequality also reinforces the many forms of systemic racism that we work to dismantle each and every day.”

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The Vermont Statehouse is often called the people’s house. I am your eyes and ears there. I keep a close eye on how legislation could affect your life; I also regularly speak to the people who write that legislation.
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