Dear Young Vermont Families...Please leave
by Michael Gardner
I don't suspect that you'll see the headline above posted anytime soon by the print-based Vermont media. However, the effect of last weeks change in the Vermont income tax structure will surely send that message.
A glaring omission in the discussion about the proposal to transition from Vermont taxes being assessed on adjusted gross income, versus taxable income, is the enormous impact it will have on young successful families.
Young Vermonters are increasingly finding work in technology related fields, as traditional manufacturing jobs continue to become unsustainable enterprises in the state. A young family is much more likely to be paying a greater amount of interest than principal on their mortgage, they also likely still have student loans (author concedes a portion of student loan interest is accounted for in AGI), and of course would be utilizing all available deductions related to their children. So in one fell swoop the Vermont legislature has been kind enough to send a message to all successful young Vermonters:
Despite what we say about wanting young people to move to Vermont and establish low impact, high paying, technology driven jobs, our actions should clear up any confusion that may be present in our rhetoric.
Our actions say that we don't want you, and we have gone so far as to introduce a great system to penalize you for thinking of moving back to Vermont. If you have a high tech job that depends on add revenue, we will tax you, If you buy a home and want to itemize deductions to reflect your gobs of mortgage interest we will tax you. If you still have student loans and hope to deduct the interest, we will tax you. If you plan on having children and working to support your family we will tax you.
P.S. If you have any unemployed friends, with a knack for procreation, we'll subsidize them.
Posted by Michael Gardner on March 21, 2011 in Current Affairs, taxation | Permalink
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Comments
Lupus Nomen
Another disincentive for young people staying in Vermont is the lack of new, entry level housing. Many young families earn too much for subsidized "affordable" housing, but not enough for much of the market rate housing on the market. The state could take two equally important steps to address this. (1) Expand and upgrade infrastructure in areas where it makes sense. It is very difficult to build at the densities necessary to create entry level housing without sewer and/or water. (2) Reform Act 250 and Local Land Use Regulations. The densities needed to build entry level housing at an affordable price are illegal in many Vermont Towns.
There is a permit reform bill currently before the legislature. It would be interesting to hear more in-depth analysis of it from the commentators on this site.
