Miscellaneous Tax Bill - A Tax Costs Less Than A Cost Shift

[Gary Gilbert]

Life under the Golden Dome is becoming more like an Alice in Wonderland world each day. There are two competing proposals to balance the budget and they both rely on tax increases. The Governors proposal is based on a property tax which would cost the taxpayer more than the house proposal which relies on an income tax surcharge. Remember that the fy2009 budget had been cut by $67.7 million dollars and the fy2010 House budget included very difficult additional cuts of over $40 million dollars.

The governor says he did not support raising taxes and his proposed budget showed no increase in the general fund because it transferred $63 million in liabilities out of the general fund and into the education fund. What he did was to simply add $63 million more that had to be raised by the property tax for education. This would mean a 13-cent per hundred property tax increase. This would require someone who owned a $200,000 home to pay an additional $260 in taxes. It would simply appear on the local education property tax bill and home owners who pay based on property values would pay all of it. His proposal cuts out VPharm-which supplies life saving drugs for senior citizens, reduces home health, probation officers and meat inspectors. It would be like taking money from a person’s savings account after they had already paid their fair share of taxes.

The House Appropriations Committee had been talking with Department heads as well as searching areas in state government that could be cut in lieu of passing a tax package that would sunset in three years. These included closure of the rest areas and information centers, closing all the courts for 12 days during the coming years, have public safety bill towns for service coverage, reduce liquor enforcement, a 4% reduction to home and residential care for the elderly and disabled, reduce state aid for the aged, blind and disabled, close the St. Johnsbury Correctional Center, eliminate all state funding for cultural organizations, close motor vehicle satellite offices or all their offices 2 days a week, mothball the fish hatcheries, reduce all general funding for the Clean and Clear Program and suspend the entire Next Generation Program. These cuts would be devastating.

A better choice would be to use the more progressive income tax instead where those who were on fixed income or losing income in these rough times would be better protected. The income tax would need to raise around $16.6 million unless more cuts could be found in the exempt employees where assistant secretaries and deputy commissioners had been hired over the last 6 years at significantly high salaries. The income tax surcharge for someone making $40-44,999 would average $27 dollars a year for 3 years. Lower incomes would be less, higher incomes more. This surcharge would be offset by the Federal $400 “Making Work Pay” tax credit which would result in lower overall taxes for Vermonters. This budget would continue life saving drugs for seniors, restore cuts to home health, physicians and hospitals, keep probation officers on the streets, preserve meat inspectors, and keep the fish hatcheries in operation and tourists coming to Vermont. So, I guess the bottom line is should we pay by taxes on home values or by income? Income is the fairest way to go. It is much preferable to shifting the cost on to someone else and claiming not to have raised taxes. The math is simple.

A cost shift hiding a tax increase would cost $260; a surcharge would cost $27. Give me the tax anytime.

Rep Kathie Keenan, St. Albans City; Rep Gary Gilbert, Fairfax/Georgia; Rep Michel Consejo, Sheldon; Rep Richard Howrigan, Fairfield

[Loctavious]

Talking about taxes, i head today that they're seriously considering adding an "I-Tune" or "Streamline" tax as well.  this would be a tax on movies, music or other sizeable things from the internet.

Maybe i woke up on the wrong side of the bed this morning, but it struck a cord.  I realize that taxes are way to pay for infrastructure among other necessities vital to a well-oiled machine of a state, but at what point do you draw the line. I've heard the arguments from smokers that they're free will is being taxed - but that's a bunch of bull as - smokers' diseases and effects on others eat huge amounts of moneys they don't have, not have insurance for.

But when will it stop?  Will we tax people out and about on sunny day - 'cause they're enjoying something on the state?  Will we tax, walking, exercising, being healthy as well?  Why not - we tax everything else that make humans happy. 

GRRRRR GRRRRRR.  Maybe i need some more coffee to attain enlightenment.

[Chris Santee]

from the world wide web:

List of Taxes We Pay
Just for fun, a list of all the taxes we pay here in the U.S.:

Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL License Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (42 cents per gallon)
Hunting License Tax
Inheritance Tax
Interest Expense (tax on the money)
Inventory Tax I
RS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Recreational Vehicle Tax
Road Toll Booth Taxes
Road Usage Taxes (truckers)
Sales Taxes
School Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Federal Universal Service Fee Tax
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Toll Bridge Taxes Toll
Tunnel Taxes
Trailer Registration
Tax Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers’ Compensation Tax

So we are taked when we make money, spend money, save money, invest money -- and die.
Ever look at your phone bill (if you have a land line)? Twice the bill is taxes.

[Chris Santee]

And I don't see Rooms & Meals Tax.

[Loctavious]

Come on Chirs, I had calmed down too!   

[Chris Santee]

sorry, bud, ya got me goin' !

[special ED]

Look you hypocrite , you said you liked paying taxes it`s for the children you said, its for a better state you said, I see it`s only good as long as it doesn't effect you

[Loctavious]

    It doesn't affect me - i pay my taxes bud - all of them.  Have never been delinquent either.  I MAY pay them as it would be unlawful not to, that doesn't mean i agree with everyone of them.  NOR does it mean i endorse the act of taxing everything in life.  Paying taxes to beenfit our kids- which DOES affect me and you and everyone else in this country, is a lot different from taxing my right to life, liberty and happiness.  i can see using them to pay back debt, to raise money for certain projects - but funny thing about taxes is that though they're created under such guises, they don't seem to go away when we've accomplished the initial goals.

[cedarman]

At this rate, maybe we'll catch up to some European countries.  I've posted a link to a wikipedia article that details TV License, or Broadcast Receiver License common in a lot of Europe, Asia, and Africa.  It can be hundreds of Euros (Euro is higher than the US Dollar) per year in some countries.

http://en.wikipedia.org/wiki/Television_licence

[Robin F]

Notwithstanding the back and forth above:

Correct me if I am wrong Gary, but doesn't the property tax already have an income sensitivity part to it? That is, if your household income is below a certain amount ($90,000 is what sticks in my head), you pay property taxes as a percentage of income at a graduated rate. The family in your example which owns a $200,000 home, if they make $45,000 per year, is very likely already paying the maximum amount possible for their property tax bill, with the rest being sent as a rebate directly to the town (that's why everyone should fill out the Homestead forms with their taxes). The tax rate would have to be very, very low to not hit the percentage of income cap on a $45,000 household income with a $200,000 home.

So, if they are already paying the maximum amount, unless the Governor's proposal changes this calculation in some way, an increase in property taxes will not have any effect on them at all, versus a $27 hit for the income tax suggestion. It seems then that the Governor's proposal is already protecting the lower income families by virtue of the protections already built in to the property tax statutory scheme. I do not always necessarily buy in to the "let's tax the rich" knee jerk reaction that always seems to happen when economic times are bad, but if the argument is that we need to protect those who are already struggling, the Governor's suggestion seems better.

Am I missing something?