Tax hikes could be on the way in Vermont as state lawmakers consider a slew of new legislation as part of its fiscal 2025 budget.
Vermont's House of Representatives is expected to vote on its state spending plan this week, considering millions of dollars in new taxes to fund a large statewide expansion of Medicaid, as well as an to increase affordable housing and expanding the judiciary.
Around $125 million in new taxes could be levied if the budget is agreed on by lawmakers, including increasing corporate income tax, foreign income tax and property transfer tax, as well as implementing an additional tax bracket for Vermont's wealthiest residents.
Under the proposals, the top marginal tax rate of corporate income tax would rise from 8.5 percent to 10 percent, as well as a property transfer tax increase from 1.25 percent to 3.25 percent for transfer values in excess of $600,000.
The additional bracket for Vermont's higher earners would apply to those who make in excess of $500,000 per year, with personal income tax levied at 11.75 percent. According to the Vermont Chamber of Commerce, this would provide $74.9 million in additional funding.
Regarding the hike for Vermont's highest income residents, Democratic State Rep. Emilie Kornheiser, who chairs the state House Ways and Means Committee, said in February: "What we see is that middle-class Vermonters are paying more than their fair share right now.
"They're paying a higher percentage of their income than the wealthiest Vermonters. We just want everyone to have a fair shake, so we can have a Vermont that works for all of us."
Not all Democratic lawmakers, however, agree. "When you are going to increase someone's taxes, people want to know what it's for," Democratic State Sen. Kesha Ram said last month. "Three percent just kind of glued on top for those who make more than 500,000 dollars is not a very surgical approach. So, I think we should be looking more at much more connected policies."
The House Ways and Means Committee passed the tax increases in a vote last week. The proposals will now head to the House Appropriations Committee to be considered. A vote is expected this week, according to Vermont news outlet WCAX3. Newsweek has contacted the Vermont General Assembly for clarification via email.
The Vermont Chamber of Commerce has urged lawmakers not to pass the changes. "The Vermont Chamber raised concerns about these new taxes and the lack of thoroughness in their review with both the committee and the Speaker of the House," it said in a release issued on March 22.
"I think we need a holistic look at what's going on in our economy - what are the cost pressures people are dealing with - to understand what is the taxing capacity we have right now," Megan Sullivan of the Vermont Chamber of Commerce, told WCAX3.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more
To read how Newsweek uses AI as a newsroom tool, Click here.
