Public Assets Institute > Policy Areas > Vermont Taxes > Fiscal Facts: A Key to Better Policy Debates

Fiscal Facts: A Key to Better Policy Debates

It may be too late for this year’s August primary elections, but for the general elections, Vermont’s political parties might want to collaborate to create fiscal fact kits for all of their candidates. It could help voters become better informed, and perhaps prevent candidates from making promises they can’t or shouldn’t keep.

The fact kits would be separate from position papers, but they would establish a common foundation on which the parties and candidate could build their positions. The kits would include basic information like the size of the state budget, tax rates, employment and unemployment numbers, as well as historical data so people could see how things have changed—or not changed so much—over time.

The idea of the fiscal fact kit came to mind after reading about a candidate for the Legislature who promised to reduce Vermonters taxes and push for a flat income tax rate of 5 percent. Five percent may sound like a pretty good deal on income taxes, especially when we think about the services the state is trying to provide. But the fact is very few Vermonters pay that much of their income in state income taxes.

According to Vermont Tax Department statistics for 2008, the latest available, it’s not until incomes reach about $300,000 that the average state income tax approaches 5 percent of income. In 2008, only 1 percent of filers had adjusted gross income of $300,000 or more. The more typical filer—those at the Vermont median family income level of $63,400—pay on average 2.5 percent of their income in state income taxes. A 5 percent flat tax, rather than reduce taxes for all Vermonters, would double income taxes for the median Vermont family. Only those in the highest income brackets—$300,000 and up—would be better off with such a flat tax proposal.

Nevertheless, if 5 percent seems like a reasonable enough income tax rate to build a political campaign around, and many Vermont families are paying less than half that amount, maybe Vermont isn’t such a high-tax state after all.

Posted by Jack Hoffman on August 17, 2010 at 3:34 pm

2 Responses to “Fiscal Facts: A Key to Better Policy Debates”

  1. lynn bohi says:

    I loved the conclusion.


    VT needs to stop manageing to the Money! Its time to start protecting the most vulnerable-disability community across the board! stop pitting vulnerable population against one another! Raise taxes now on the Rich! A budget is a document of Values.