State and local taxes as a share of family income, by tax and quintile, 2024

November 21, 2024 | Sarah Lyons

Poverty & Inequity, State Budget & Tax

Vermont is one of the few states where the tax system does not make inequality worse
The system is mostly progressive but still regressive at the top, meaning the highest-income Vermonters pay a smaller share of their income in taxes than many middle-class Vermonters
Sales taxes tend to be the most regressive, although Vermont exempts many necessities like food, clothing and prescriptions
Vermont’s income tax is progressive
Property taxes tend to be regressive but Vermont’s is progressive at the low end because of income sensitivity in school taxes